California is cracking down on the gig economy(vox.com)
vox.com
California is cracking down on the gig economy
https://www.vox.com/policy-and-politics/2019/5/30/18642535/california-ab5-misclassify-employees-contractors
321 comments
I'm coming to the view that gig workers are neither employees nor independent contractors. Employees don't get to unilaterally set their own hours, and contractors don't get prices unilaterally dictated to them or barred from their profession if their rating falls too low.
All this regulatory squabbling is arguing over whether a square peg fits a round hole or fits a triangular hole.
We need a third classification for gig workers that affords them some protections while preserving the economic viability of ridesharing companies. Disregarding any problems we might have with specific companies, I think ridesharing companies are a benefit to consumers.
All this regulatory squabbling is arguing over whether a square peg fits a round hole or fits a triangular hole.
We need a third classification for gig workers that affords them some protections while preserving the economic viability of ridesharing companies. Disregarding any problems we might have with specific companies, I think ridesharing companies are a benefit to consumers.
From TFA:
Uber would likely have to reclassify tens of thousands of drivers in California as employees — something Uber drivers have been fighting for in court, unsuccessfully, for years.
"Fighting for in court" links to https://www.vox.com/2019/5/8/18535367/uber-drivers-strike-20... - which includes these choice paragraphs:
It’s worth reemphasizing this: Uber doesn’t want to pay drivers to take 15-minute rest breaks every few hours because it would cost too much, even though all US employers are required to give hourly workers paid breaks under federal law.
In the filing, the company says that dissatisfied drivers could become a business liability, as recent protests in India, the United Kingdom, and the United States have interrupted business on the platform. Instead of outlining ways to make drivers happy, Uber suggests it will just get worse.
“As we aim to reduce driver incentives to improve our financial performance, we expect Driver dissatisfaction will generally increase,” the company stated.
Sssssooo this maybe sounds like something employees who have been doing these jobs have been wanting for a while...
Uber would likely have to reclassify tens of thousands of drivers in California as employees — something Uber drivers have been fighting for in court, unsuccessfully, for years.
"Fighting for in court" links to https://www.vox.com/2019/5/8/18535367/uber-drivers-strike-20... - which includes these choice paragraphs:
It’s worth reemphasizing this: Uber doesn’t want to pay drivers to take 15-minute rest breaks every few hours because it would cost too much, even though all US employers are required to give hourly workers paid breaks under federal law.
In the filing, the company says that dissatisfied drivers could become a business liability, as recent protests in India, the United Kingdom, and the United States have interrupted business on the platform. Instead of outlining ways to make drivers happy, Uber suggests it will just get worse.
“As we aim to reduce driver incentives to improve our financial performance, we expect Driver dissatisfaction will generally increase,” the company stated.
Sssssooo this maybe sounds like something employees who have been doing these jobs have been wanting for a while...
> That small status change is huge. These workers would suddenly get labor protections and benefits that all employees get, such as unemployment insurance, health care subsidies, paid parental leave, overtime pay, workers’ compensation, and a guaranteed $12 minimum hourly wage.
That’s an pretty optimistic take on the situation. What these new “employees” are going to get, is fired.
I know some people are OK with that, if the task isn’t profitable enough to pay a human full benefits to work on it, then it’s not profitable enough to employ a human to do it at all.
But there’s a lot of space to integrate under the employment curve for these types of super-low-skill jobs that people mostly use to fill in the gaps in their earnings. I think ultimately this does a huge disservice to the people who worked these gigs to earn some extra money, because it will no longer be possible to do that.
What will be left is full-time workers in these roles who have no other choice, who probably have a significantly shittier work experience doing jobs or working hours they previously would have passed on.
Which honestly is sad, because there is little to no advancement opportunity, so this is not supposed to be a career, and you’ve taken away the option for all these low friction ways to make up a financial gap that might come up one month to the next.
If someone finds themselves struggling to pay rent next week and they know they’ll be facing an eviction notice in 10 days, today they can jump on any number of apps and make up that couple hundred dollar shortfall. That’s not going to be possible if they’re classified as an employee.
That’s an pretty optimistic take on the situation. What these new “employees” are going to get, is fired.
I know some people are OK with that, if the task isn’t profitable enough to pay a human full benefits to work on it, then it’s not profitable enough to employ a human to do it at all.
But there’s a lot of space to integrate under the employment curve for these types of super-low-skill jobs that people mostly use to fill in the gaps in their earnings. I think ultimately this does a huge disservice to the people who worked these gigs to earn some extra money, because it will no longer be possible to do that.
What will be left is full-time workers in these roles who have no other choice, who probably have a significantly shittier work experience doing jobs or working hours they previously would have passed on.
Which honestly is sad, because there is little to no advancement opportunity, so this is not supposed to be a career, and you’ve taken away the option for all these low friction ways to make up a financial gap that might come up one month to the next.
If someone finds themselves struggling to pay rent next week and they know they’ll be facing an eviction notice in 10 days, today they can jump on any number of apps and make up that couple hundred dollar shortfall. That’s not going to be possible if they’re classified as an employee.
While I am sympathetic to Uber and Lyft drivers and other gig economy workers, I am wondering if anyone has the done the calculus on job losses vs. making something. And whether making something is better than being jobless. I met a Uber driver the other day who drives 5000 miles per month. Clearly that is close to exploitation. But if Uber is forced to pay drivers 100% more surely there will be fewer drivers. And many people may not have a path to make money. In addition, I have met many Uber drivers who are retired and only do few hours over the weekend for supplemental income. This sweeping bill will also take out those positions. It feels like short sighted without accounting for these edge cases.
Also, what is the difference between Uber and eBay / Airbnb ? Can a seller in eBay or a host at Airbnb be considered an employee ? Essentially both eBay and Airbnb have no business without their sellers or hosts. One can claim that these are marketplaces, but the only difference between these marketplaces and Uber is that Uber sets price (according to the ABC test). Can Uber then simply skirt the law by allowing a price "opt-in" suggestion ? or even outsourcing pricing to another LLC ?
Edit: just thinking more about my last point. Uber can easily let drivers set their own price and simply show the lower price range to the passenger. Will be interesting to see how that plays out
Also, what is the difference between Uber and eBay / Airbnb ? Can a seller in eBay or a host at Airbnb be considered an employee ? Essentially both eBay and Airbnb have no business without their sellers or hosts. One can claim that these are marketplaces, but the only difference between these marketplaces and Uber is that Uber sets price (according to the ABC test). Can Uber then simply skirt the law by allowing a price "opt-in" suggestion ? or even outsourcing pricing to another LLC ?
Edit: just thinking more about my last point. Uber can easily let drivers set their own price and simply show the lower price range to the passenger. Will be interesting to see how that plays out
> The California bill, known as AB5, expands a groundbreaking California Supreme Court decision last year known as Dynamex. The ruling and the bill instruct businesses to use the so-called “ABC test” to figure out whether a worker is an employee. To hire an independent contractor, businesses must prove that the worker (a) is free from the company’s control, (b) is doing work that isn’t central to the company’s business, and (c) has an independent business in that industry. If they don’t meet all three of those conditions, then they have to be classified as employees.
What does this mean for engineers who are independent contractors in California? It's arguable that an engineer would likely be working on something that is central to a company's business, and whether said engineer has an "independent business" in their industry.
What does this mean for engineers who are independent contractors in California? It's arguable that an engineer would likely be working on something that is central to a company's business, and whether said engineer has an "independent business" in their industry.
The people I see working gig economy jobs seem to come from diverse socioeconomic backgrounds, ranging from people with new Teslas to those who look like they are on the margins of society.
With respect to the latter, these are people who I don't see in any other occupation. I assume the reason they work these jobs is that they cannot get traditional jobs which generally have higher barriers-to-entry due to higher guaranteed wages and more benefits.
If gig economy jobs are made to be more like other jobs, then the same barriers to entry are going to emerge.
It's the very low-cost nature of providing these jobs that makes them accessible to those at the lower end of the skill scale.
Th US has actually seen wages for low-skilled workers grow very quickly over the last couple of years and perhaps it is not a coincidence that it has been over the last couple of years when the number of gig economy jobs has grown to become a significant portion of the total job market.
Basic economy theory dictates that increasing the sources of demand for low-skilled labor will increase wages for low-skilled labor. That's why gig economy jobs shouldn't be prohibited.
With respect to the latter, these are people who I don't see in any other occupation. I assume the reason they work these jobs is that they cannot get traditional jobs which generally have higher barriers-to-entry due to higher guaranteed wages and more benefits.
If gig economy jobs are made to be more like other jobs, then the same barriers to entry are going to emerge.
It's the very low-cost nature of providing these jobs that makes them accessible to those at the lower end of the skill scale.
Th US has actually seen wages for low-skilled workers grow very quickly over the last couple of years and perhaps it is not a coincidence that it has been over the last couple of years when the number of gig economy jobs has grown to become a significant portion of the total job market.
Basic economy theory dictates that increasing the sources of demand for low-skilled labor will increase wages for low-skilled labor. That's why gig economy jobs shouldn't be prohibited.
In the 80s IBM got the federal law changed so that tech workers no longer had a safe harbor provision to be 1099s. They wanted to pay less for the workers, and they got their wish. The take home for tech workers dropped a lot. You have to wonder what the big interest is that is pushing this puff piece from vox.
This law will have an overall negative impact on people who want to work independently and take care of their own stuff.
Here's how its already impacting freelance journalists:
https://www.cjr.org/united_states_project/california-freelan...
We're not talking about slave labor here. It's a consensual relationship.
If I want to be a 1099 and be more independent, I'm not sure what the state's interest is here.
This law will have an overall negative impact on people who want to work independently and take care of their own stuff.
Here's how its already impacting freelance journalists:
https://www.cjr.org/united_states_project/california-freelan...
We're not talking about slave labor here. It's a consensual relationship.
If I want to be a 1099 and be more independent, I'm not sure what the state's interest is here.
I totally get the negative consequences of gig jobs: no benefits, security and so forth. But whenever I take an Uber or Lyft (maybe 100 in the US and UK) I ask the driver how they feel about the job. Almost all of them are happy with it - some gripe about the pay but they like the flexibility. It's possible they aren't thinking far enough ahead - and I'm talking to the self selected group who didn't get a disabling injury or illness and fall into poverty.
I just don’t understand who is being protected here.
When I talk to people doing these jobs they are glad to have them, and don’t have a problem with the terms. They like the flexibility and many are doing them as a stepping stone to the next thing.
If an Uber ride becomes more expensive, how does that benefit an elderly person living on social security who can’t walk well and has to get across town?
When I talk to people doing these jobs they are glad to have them, and don’t have a problem with the terms. They like the flexibility and many are doing them as a stepping stone to the next thing.
If an Uber ride becomes more expensive, how does that benefit an elderly person living on social security who can’t walk well and has to get across town?
This will most likely result in a loss of many jobs. If Uber/Lyft is going to be forced to reclassify contractors as employees, there will be stricter guidelines on who will actually be able to work for them (which means less people working for them), because the company simply will not be able to afford to pay insurance and a higher wage for everyone and anyone that wants to drive for them.
Everyone has a choice: You can choose to work for Uber/Lyft and make extra money or get a job somewhere else that provides benefits and a higher wage. There is no scam going on and everyone is trying to make a buck. I see no problem with classifying the drivers as contractors.
Everyone has a choice: You can choose to work for Uber/Lyft and make extra money or get a job somewhere else that provides benefits and a higher wage. There is no scam going on and everyone is trying to make a buck. I see no problem with classifying the drivers as contractors.
Just charge drivers $1/day to use the platform and now they aren't contractors, they're customers.
We finally have the closest thing to a guaranteed jobs program that's ever existed in the USA, and California (and New York) wants to destroy it? This is disgusting.
If I want to drive for Uber, all I have to do is pass a background check. When I want to drive for them, all I have to do is turn on an app. When I'm done, I turn off the app. I can work whenever I feel like it. Very low stress! I get wanting to "protect" workers but this ain't it. I want Uber/Uber-like things to exist so I can earn a few dollars here and there if I need to.
Ugh, sorry, this makes me so angry and other people have been much more eloquent on the subject.
If I want to drive for Uber, all I have to do is pass a background check. When I want to drive for them, all I have to do is turn on an app. When I'm done, I turn off the app. I can work whenever I feel like it. Very low stress! I get wanting to "protect" workers but this ain't it. I want Uber/Uber-like things to exist so I can earn a few dollars here and there if I need to.
Ugh, sorry, this makes me so angry and other people have been much more eloquent on the subject.
This, along with the need to offset $1B operating losses will severely cripple Uber. I enjoy the convenience of using an Uber to get around town but afraid these coming actions will raise prices significantly.
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It would be interesting if I could see someone do the math on where all the money (for example) Uber would need to pay as a result of this actually goes.
How much of a bill like this is actually the government looking to increase revenue, and how much of it would ultimately benefit pole dancers?
Uber drivers are a particularly weird case because there is no way to really stop them from working for Lyft at the same time ... so they are supposed to get a guaranteed minimum wage? From each ride service they drive for?
How much of a bill like this is actually the government looking to increase revenue, and how much of it would ultimately benefit pole dancers?
Uber drivers are a particularly weird case because there is no way to really stop them from working for Lyft at the same time ... so they are supposed to get a guaranteed minimum wage? From each ride service they drive for?
I don't understand the implications of the second item in the test: "doing work that isn’t central to the company’s business."
How does this apply to business-to-business contracting arrangements, especially in the world of software engineering? Businesses hire contract labor from vendors all the time--are those laborers to be considered employees of both the vendor and hiring company now?
How does this apply to business-to-business contracting arrangements, especially in the world of software engineering? Businesses hire contract labor from vendors all the time--are those laborers to be considered employees of both the vendor and hiring company now?
I wish they would rework the laws so that being an employee or contractor mattered less. It seems we've created a perverse financial incentive to encourage this behavior of pretending everyone is a contractor.
“Here we are in a great economy and yet most working people have no money saved,” Caitlin Vega, legislative director for the California Labor Federation, told me.
This quote from the article resounds heavily with me.
This quote from the article resounds heavily with me.
Why don't we start with extending some employee coverage to 1099? Like just one thing healthcare, and idk car insurance for Uber/Lyft and then see how it goes.
Sounds better than dealing with extremes.
Sounds better than dealing with extremes.
Then what's the point if gig economy?
With these laws it won't be profitable for those companies to run their business.
With these laws it won't be profitable for those companies to run their business.
seems like same topic as https://news.ycombinator.com/item?id=20065910
Ah yes, legislation from a "helpful government" which will ultimately drive companies which depend on quasi-contractors to develop their robot replacements at an accelerated rate.
Classic political short-sightedness.
Classic political short-sightedness.
Gig economy is a capitalisam at it’s worst.
Consumers, make no mistake, This will drive up costs of using uber just like everything else in CA
And it will reduce the # of uber driver demand / work pool
And it will reduce the # of uber driver demand / work pool
Good news for workers
Increasing benefits and worker protections also increases the cost of hiring employees. This is widely understood. In countries where employees have extensive benefits and protections like France, employers are very picky about which employees they hire because it will be difficult or expensive to fire them if they turn out to be poor workers. Hence, and unemployment rate over twice that of the US.
The ease of entering and exiting the gig economy is one of its most valuable aspects. What other kinds of jobs can you set your own hours, and join and quit largely at whim? If Uber, Lyft, DoorDash, etc. all now have to consider their contractors employees then they will have to start setting hours. If they have to give their workers the same benefits as employees, then it will be financially unsustainable to let them set their own hours. People who depended on Uber for flexible employment will not be able to continue working.
This seems like political posturing that's going to hurt the majority of employees if it passes.
The ease of entering and exiting the gig economy is one of its most valuable aspects. What other kinds of jobs can you set your own hours, and join and quit largely at whim? If Uber, Lyft, DoorDash, etc. all now have to consider their contractors employees then they will have to start setting hours. If they have to give their workers the same benefits as employees, then it will be financially unsustainable to let them set their own hours. People who depended on Uber for flexible employment will not be able to continue working.
This seems like political posturing that's going to hurt the majority of employees if it passes.
There are some people out there who only want to drive for companies like GrubHub, but most of the drivers are people who already have jobs and are using the gig as supplementary income.
The topic has come up before in these communities about whether they want to be employees or contractors. At the end of the day, most people want to stay contractors because they already have other jobs and want to make some extra cash during their off hours and weekends, and being an employee would actually mean being their GrubHub's bitch because then they could be told that they can't refuse to pick up orders that are too far away.
While I do see the argument that businesses shouldn't be using contractors as a replacement for employees, unless we solve the problem of stagnating wages, doing so will take away a lot of needed extra income from people who don't feel wronged by these companies.