Similar argument for changing toppings on a cake - a caterer can negotiate changes to the cake - an Uber driver has no such flexibility.
Regardless, given corporate (human?) nature is to leverage any power differential to self-benefit, it seems reasonable that regulations be interpreted in the most protective (of the party with less power) manner possible.
It's much more analogous to a contractor working for a general contractor -- if I'm a plumber I can take gigs from multiple general contractors, and my ability to negotiate with the customer directly is very limited; instead I'm usually left negotiating with the general contractor, often just with a take it or leave it price. The general contractor is not the employer in this case.
Why not? You could take a contract to build a shed by the end of the day and then not have time to build any others that day.
If you're a contractor hired to build a shed and it takes you 8 hours, you're there all day. But if you can build it in 2 hours, you get to go home, and you still get paid the same.
If you're a Target employee brought in to do inventory and it takes most people 8 hours but you finish in 2, you're only going home if you don't want to get paid for the other 6 hours. Otherwise you're going to be stocking shelves or sweeping floors or working a register until the clock runs out.
Driving works like the first one. If you can make a 45 minute drive take 42 minutes, you get to keep the other 3 minutes. (In theory if you can make a 45 minute drive take 15 minutes you get to keep the other 30 minutes, but good luck with that.)
The situations where a contractor relationship applies are plain and obvious. Any time you have to ask if someone is an employee you are probably exploiting the fine line to avoid having to follow the law. Kind of like if you have to ask if you are actually committing fraud you probably are. Depending on which side of the fine line a judge comes down on you may or may not be punished for it but you aren't a better person for it.
As it is, I see the preponderance of arguments on the side of it being regular employment without the expected benefits.
For what it's worth every Uber ride I've taken I would have taken at double the price, it's possible they could afford to pay their full time drivers benefits.
Let's evaluate this for a moment.
Suppose the people driving for Uber could get a job somewhere else as an employee. In this case they willingly chose the driving job with e.g. more flexible hours over the other job with employment status, so why are we second guessing their choice and trying to take it away?
Now suppose the other job isn't available to them. Job prospects for unskilled workers are pretty bad, so it's either Uber or unemployment. Then it's the same thing -- they'd rather drive for Uber as a contractor than be unemployed, so why should we take that option away from them?
The theory behind forcing them to be employees is that it's "better" for them. If they're employees they get employee benefits. But then they can't work part time anymore, because if the company is going to pay full time benefits then they're going to want full time hours. Flexible hours go away too, because if they're forced to pay benefits they can use them to attract people who don't need flexible hours and no longer have to accommodate people who do.
Then the benefits cost money, but the company's margins are pretty thin so the only place to get the money is by making rides more expensive. That hurts all the working class people who have to pay more for rides, but it also lowers demand for rides. Lower demand, fewer drivers.
So a lot of the existing drivers, and specifically the most vulnerable of them who can't find another job or need the flexible schedule, lose their jobs.
They might be better off if we don't "help" them like this.
Classifying things like unemployment insurance under that banner is silly, because anybody who wants it can go buy it with money, so it makes no sense to require it rather than letting workers and companies negotiate over whether they'd rather have that or some other thing like higher pay. Every company has to convince their workers to work there and not somewhere else, so everything like that which they don't provide requires them to provide something else instead.
Imposing those requirements hurt workers by taking their options away -- somebody who knows they're only going to be a driver for four years as they work their way through college may very well be better off to have the money that would otherwise be paid to the insurance carrier than to have the unemployment insurance, which they'll not use anyway because Uber doesn't do "layoffs" of contractors and it's very unlikely demand for rides is going to disappear in the next four years.
Who's taking it away, though? There's no law that a company can't offer employees flexible hours, and nobody's arguing that there should be. If Uber decides employee drivers can't have flexible hours, then that's on them. This argument is a non-sequitor with regard to employee/contractor status.
> Now suppose the other job isn't available to them. Job prospects for unskilled workers are pretty bad, so it's either Uber or unemployment. Then it's the same thing -- they'd rather drive for Uber as a contractor than be unemployed, so why should we take that option away from them?
Is it "Uber or unemployment", though? Are unskilled workers without a car just completely screwed? No, because those aren't the only two choices. Do you know of an actual case where a person has had no other choices than Uber and unemployment? It's a red herring.
> The theory behind forcing them to be employees is that it's "better" for them.
I can't speak to France, but in the United States the difference has a lot more to do with taxes and social security than it does with any immediate, direct benefits to the employee.
> If they're employees they get employee benefits. But then they can't work part time anymore, because if the company is going to pay full time benefits then they're going to want full time hours. Flexible hours go away too, because if they're forced to pay benefits they can use them to attract people who don't need flexible hours and no longer have to accommodate people who do.
Again, I don't know about France, but in the United States "employee benefits" have almost nothing to do with employee/contractor status. No company is required to provide any benefits other than wages. If Uber decides employee drivers don't get flexible hours, that's on them, not the law.
> Then the benefits cost money, but the company's margins are pretty thin so the only place to get the money is by making rides more expensive. That hurts all the working class people who have to pay more for rides, but it also lowers demand for rides. Lower demand, fewer drivers.
In the United States, the "benefits" are things like unemployment insurance, social security, income tax, and things like that, which the drivers should already be paying for themselves. In theory this is already coming out of the driver's earnings, so having the company pay it instead shouldn't make a difference to the end user's price.
The flexible hours come in exchange for contractor status. If they paid employee benefits they could attract employees who don't need flexible hours. Which means if you force them to pay employee benefits either way, they take those workers instead of the ones who need flexible hours and the ones who need flexible hours are out of work.
> Is it "Uber or unemployment", though? Are unskilled workers without a car just completely screwed? No, because those aren't the only two choices. Do you know of an actual case where a person has had no other choices than Uber and unemployment? It's a red herring.
It's one of the two possibilities. The other is that they had the option of working for someone else as an employee but willingly chose Uber, e.g. because of flexible hours. Or maybe they like driving a car better than cleaning toilets. Whatever the reason, you're taking away that option.
> I can't speak to France, but in the United States the difference has a lot more to do with taxes and social security than it does with any immediate, direct benefits to the employee.
In the US the employee and employer each pay half of social security. Contractors are "self-employed" so they pay both halves. But everybody knows this, so you have to pay a contractor that much more (or provide some other valuable consideration like flexible hours) to get them to work for you instead of somewhere they're an employee. If you make Uber drivers employees, more people want the job and by supply and demand the wages go down.
> Again, I don't know about France, but in the United States "employee benefits" have almost nothing to do with employee/contractor status.
There are a bunch of rules and incentives with respect to employer-provided health insurance, unemployment insurance etc. that apply to employees and not contractors. If there was no difference then why would anybody care about how the drivers are classified?
In general you could expect a reclassification to negatively impact everyone involved, because being an employee involves a lot more paperwork and bureaucracy but the value in any advantage from it should then get reflected in correspondingly lower compensation (or loss of employment if that level of compensation falls below minimum wage).
You keep saying that, but there's nothing backing it up. Contractors typically have more flexible hours, but companies are free to allow flexible hours if they want to. If the drivers were employees, it would be Uber's choice to give them flexible hours or not.
> If they paid employee benefits they could attract employees who don't need flexible hours. Which means if you force them to pay employee benefits either way, they take those workers instead of the ones who need flexible hours and the ones who need flexible hours are out of work.
That's all speculation, though. Maybe the displaced employees will start an Uber competitor that does give flexible hours, beat out Uber, and become the next unicorns. It could be the best thing that ever happens to them...
Really, it's a wash. One group loses a specific job option because they need flexible hours and Uber (supposedly) won't allow it , and another group gains that option because they need regularity.
> There are a bunch of rules and incentives with respect to employer-provided health insurance, unemployment insurance etc. that apply to employees and not contractors. If there was no difference then why would anybody care about how the drivers are classified?
Who is paying for the driver's insurance right now, though? If each driver pays for their own then they'll collectively save a ton of money on a corporate group plan. Employees working under 30 hours a week aren't even required to get employer provided insurance, though, so there may not be a change for people taking advantage of those flexible hours...
> In general you could expect a reclassification to negatively impact everyone involved, because being an employee involves a lot more paperwork and bureaucracy but the value in any advantage from it should then get reflected in correspondingly lower compensation (or loss of employment if that level of compensation falls below minimum wage).
There's not more paperwork and bureaucracy - the existing paperwork and bureaucracy is just concentrated into Uber's HR and finance departments, instead of being done by thousands of drivers.
The reason they give them flexible hours is in exchange for not having to do the things that come with classifying them as employees. It's what allows them to attract drivers even when they're classified as contractors. If they paid benefits then they could attract drivers without offering flexible hours -- but that doesn't help the drivers who need flexible hours and not benefits.
Not only that, they would be less able to offer flexible hours. When they're hiring contractors, they don't have to care what hours people want to work. If you're an employee, 30 hours is not an option, because if you're working enough to require benefits then they're going to want to make the most of it by having you work 40 hours. But 60 hours is out too, because as an employee you're not going to be approved for overtime. Choosing your own schedule is also out, because for contractors they'll take anyone at any time they're willing to work, but if they're paying benefits and need you to work a specific number of hours a week then they'll want to schedule those hours at times that maximize the number of rides rather than whenever is easiest for you.
Saying that they could still allow flexible hours in a theoretical sense doesn't help anybody when reclassification as employees gives them all these incentives not to.
> That's all speculation, though. Maybe the displaced employees will start an Uber competitor that does give flexible hours, beat out Uber, and become the next unicorns. It could be the best thing that ever happens to them...
Maybe they'll win the lottery five times in a row and then get elected President of the United States. That's speculation.
It's not speculation to say that if Uber pays benefits, it makes it easier for them to attract employees, which allows them to do other things that are less attractive to employees and still find workers. The thing they choose to claw back may be the flexible hours or it may be something else, but it'll be something the drivers currently have which Uber will no longer have to offer because their job would be competitive without it if they paid benefits.
> Really, it's a wash. One group loses a specific job option because they need flexible hours and Uber (supposedly) won't allow it , and another group gains that option because they need regularity.
Work with flexible hours is a lot more scarce than shift work, so making it unavailable in exchange for much more common shift work is not a wash. It's a huge problem for people who need flexible hours.
Also, regularity is a subset of flexible hours. If you want to work 9-5, a job with flexible hours allows that. So you're not adding an option, you're only taking one off the table which was hard to find to begin with.
> Who is paying for the driver's insurance right now, though? If each driver pays for their own then they'll collectively save a ton of money on a corporate group plan.
For a normal corporate group plan, maybe, but think about the context here. You have a group which is inherently at high risk of medical bills due to car accidents. Then this is a job where they accept anyone with a valid driver's license. First thing that happens to that corporate group plan is that everyone without health insurance who gets diagnosed with cancer or cardiovascular disease or diabetes signs up as a driver and uses the "new job" condition to immediately take the insurance.
That group plan would cost more than what you could get on the exchanges.
> Employees working under 30 hours a week aren't even required to get employer provided insurance, though, so there may not be a change for people taking advantage of those flexible hours...
The people taking advantage of flexible hours aren't necessarily the people working less than 30 hours. If you want to work 5 hours while your kids are at school at 2 hours after they go to bed, you'll have a hard time negotiating that schedule at Target, but it's still 35 hours a week.
The people who work under 30 hours may not see much of a difference, but "this change may have no real effect on a particular subgroup of people" is not actually an argument that it is benefiting them.
> There's not more paperwork and bureaucracy - the existing paperwork and bureaucracy is just concentrated into Uber's HR and finance departments, instead of being done by thousands of drivers.
In other words, there is more paperwork and bureaucracy. Because there are still thousands of drivers, but now there is an extraneous middle man between the drivers and their insurance carrier, making choices on their behalf that they might not prefer and processing paperwork that the insurance carrier will only have to process again.
I would have taken a ride at double the price. But, for example, on the rare occasions I've used a ride-share from my house to the airport for personal travel, it's purely been because of price. Were it double the price, I'd just book a private car like I do for business travel.
So only rich people should have opportunities?
And 'normal employment' means 'unemployment' for a lot of people in France these years.
France should encourage more companies to enter and contest the market that Uber is in.
See https://www.idiosyncraticwhisk.com/2019/05/uber-and-wages-in... for how when Uber and eg Lyft are both operating in the same market, the result is almost a textbook case of perfect competition.
They don't know they can do both and went with what they believed to be the most popular. These are usually uber only drivers.
They had a bad experience with too many customers on one platform. These are usually Lyft drivers that are actually using the platform for the occasional side money instead of a full on job.
Now, would you say that builder is employed by this website? If so, at what point did this turn from self-employment to employment?
> Similar argument for changing toppings on a cake - a caterer can negotiate changes to the cake - an Uber driver has no such flexibility.
If the customer wants a cake for wedding: vanilla with 3 layers and a cherry on top it seems a bit inappropriate to contact them saying "I can't make a vanilla cake but how about chocolate?"
It's a limitation of the platform (limitations made to improve customer experience - imagine if you had to negotiate for every taxi ride, you don't do this for local companies). I'd argue that the hypothetical platform described can set any number of limitations, as long as the builder can hop off and get his work elsewhere at any point.
Really, imo, the key here is how much control the Uber driver has to refuse tasks, and if they can seek the same work elsewhere (eg is Lyft available in the city?). You wouldn't tell your boss "eyy sorry chief, bit tired, gonna head home, give the fare to someone else, byeee!! hangs up" -- but you can on Uber.
In the cake example, a baker absolutely could attempt to negotiate for chocolate. They might not "win" the negotiation, but they have the option.
Edit - in the taxi driver (traditional taxi in US), I'd argue that most of them should be employees too. Sometimes they are employed directly by "Acme Cab" or whatever. But, in the case of the local airport taxi company (Washington Flyer), the company has a monopoly on airport transport, but drivers are independent contractors - this always struck me as a very lopsided and questionable arrangement. If a driver wants to pick up at Dulles, they have to contract for Wash Flyer at fixed rates, renting a company car, etc.
And I'll freely admit this all can be a bit ambiguous. And that I'm not a fan of the "gig economy" in general - I'm convinced corporations are using it to reduce wages and benefits and effectively foist the cost of those lower wages/benefits on society as a whole.
I think the problem with a lot of these gig economy services is that they are often pumped by VC/PE money in an attempt to generate monopolies by over-capitalizing. If we got rid of that dynamic (which is a difficult problem) then this disappears. If there are a hundred different Ubers, operating in different cities, then gig workers are put in a better position to bargain by selecting a service to use.
The cost here is that the customer is inconvenienced; a single app with a single payment system seems like a better deal. But distributing this responsibility actually makes the overall system more robust and leads to interesting solutions throughout the stack, rather than converging on whatever terrible systems have been hard-coded by the over-capitalized market leaders.
The customer demand (customer being the drivers) tells a completely different story of people being more productive than legacy taxi systems by taking responsibility themselves.
I think a lean "gig economy" without the full load of bureaucracy is largely positive and really dislike how it is torn down here in Europe...
Responsibilities like the value depreciation of their vehicle, or paying for sick leave and time off.
Full time employment provides strong protection against unexpected illness. The gig-economy doesn’t.
Companies like Uber seem to prey on large pools of semi-innumerate drivers who either don’t realise they’re operating a loss and too desperate to care.
The result is your productivity gains, which only exist because some of the costs simply aren’t accounted for and ignored. These aren’t real productivity gains, that’s just socialising costs and clever accounting to justify it.
Without hard data this is just a far fetched claim. You are implying that „a large part“ (how large?) people are too dumb to make this decision for themselves. Even though I do not doubt that these people exist, what is the relative threshold where all others should be restricted by rules made for that geoup? Also I would argue that there is a learning effect if someone notices he operates at a loss and can learn from others who are making a profit. This might be very valuable in fighting „learned helplessness“. But as you might notice: I am always in favor of doing things the hard way, with short term pain than obfuscating the price signals for short term ease only compensating the symptoms.
I think it's ambiguous too. Though I disagree with the criteria set by this court, I'm not entirely sure on what the right criteria is. I think Uber play a line between employment and self-employment to keep it ambiguous, and I certainly agree it's to make sure they don't have to provide full employment benefits to their drivers, but I still think the classification/distinction is tricky.
If drivers are indeed employees, as I mentioned in my other comment, I think Uber gain a lot of rights over their drivers that they don't currently have.
Cab drivers have to receive a public license from the city to work in that city (and can only have one)
They can't decide the price, which is fixed according to some rules and are all the same for every cab in the city
The shouldn't sell the licence even if most of them do (gray legal area)
But they are not considered employees of the city but as freelancers
How do they "negotiate" the price?
They try to follow the most rewarding route for them and, unless the customer knows which is the fastest route, they get away with it
I'm not a fan of the gig economy either, but Uber drivers look to me are willing to work at their rules, their hours and on the gigs they like, which is different from what we consider being regular employees in Italy
- The rates are rather high, so the e.g. the costs for the car are taken into account and still the driver earns a decent living
- The city does not take a significant share of every fare paid
As long as the system is somewhat balanced and no turbo capitalism exploiting drivers in a weak position nobody tries it up to the supreme court. (In the US the legal system is less balanced, so I don't think Uber drivers would make it to the supreme court, not even dreaming of getting a similar verdict.)
I don't think that's really a relevant argument to whether they should be classified as employees. Huge segments of the economy have already fallen apart, and more will fall apart in the future.
Their model is to be a gatekeeper to customers via their platform - if they are successful, none of those blue collar workers trying to climb out of underemployment will have a chance at running a small ride business, because only large platforms have access to customers.
If everyone suddenly becomes a freelancer, companies are free to push externalities onto society because there will be enough people willing to take the hit to their rights/benefits for any kind of employment. It's a race to the bottom that benefits only the company that has access to the customer base.
We have to choose whether we want that or not.
Probably yes. The terms are being set by the platform.
> It's a limitation of the platform (limitations made to improve customer experience - imagine if you had to negotiate for every taxi ride, you don't do this for local companies).
I've never used Uber. Does the customer get to choose the driver? On this hypothetical platform, does the customer get to choose the builder?
This is in general...
A driver can decline rides before accepting (because destination is out of their desired area or time exceeds 45 minutes), but that can impact driver rating (or at least, it used to do so). Drivers can also refuse drunk passengers, unaccompanied minors, and a few other things like that.
I'm not aware of any way for a passenger to refuse a driver, short of cancelling the ride completely (which has a fee associated if done close to actual pick-up). And, if you make another ride request, you might get the same driver again.
That is price negotiation. The market price changes all the time in response to supply and demand. If you're not willing to do it for a lower price and someone else is, you lose business to them. An hour later there is more demand and you can get some business at your price. Or you can lower your price (accept both rides) and get business both times.
Narrowing the choice to "accept or reject" isn't really removing the price negotiation, it's just simplifying it down to what it inherently always was to begin with.
> Similar argument for changing toppings on a cake - a caterer can negotiate changes to the cake - an Uber driver has no such flexibility.
They get to choose what kind of car to drive, where to buy gas, what hours to work. What would you say is the equivalent thing they don't get to choose?
> Regardless, given corporate (human?) nature is to leverage any power differential to self-benefit, it seems reasonable that regulations be interpreted in the most protective (of the party with less power) manner possible.
But what does that even mean in this case? Isn't the party with less power the one that would be out of work if reclassified as an employee, because employees have less flexibility etc. than contractors?
Kicking people off for accepting rides and then canceling them makes perfect sense because once you accept the ride, the customer is waiting and they're not looking for another driver. It also discourages drivers from looking at the destination and then refusing rides that legally they're not supposed to, like trips into black neighborhoods.
Accepting in the first place either happens or doesn't in only a few seconds, and if you don't they immediately go on to the next driver. At best they have the incentive to make you manually re-enable your availability to drive if you neither accept nor decline more than a couple of rides in a row, so they can stop routing rides to you if you're not actually there. In makes no sense to kick you off over it, so why would they do that?
The 'market price' changes as Uber decides it should. There is no actual market where agents can set their prices present.
Which is what allows agents to set their prices. If prices are too high, some riders exit or more drivers enter which causes prices to decline. If prices are too low, some drivers exit or more riders enter which causes prices to increase. Is this not the ordinary mechanism of market pricing?
"In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority and from all forms of economic privilege, monopolies and artificial scarcities."[1]
What you have then isn't a transaction between the driver and the rider, it's two transactions, one between the driver and Uber and another between Uber and the rider. Each transaction is negotiated. Uber changes their offers to each party based on supply and demand, and if either party doesn't like it they can hold out for a better offer or go use Lyft. And since Uber does actually adjust pricing based on supply and demand, the better offer actually comes when enough people hold out.
The way you negotiate with them is by delaying your purchase/sale until they meet your price. It's a functioning market.
Competition does the rest.
The argument presupposed that you refuse to negotiate. To say "but you can negotiate" sidesteps the whole thought experiment. You post the job at a fixed price. It's in writing on your posting, "fixed price". A builder accepts it. Or maybe they try to negotiate and you refuse and they do it anyway, or someone else accepts it. Either way someone ends up doing the job at your fixed price. Does the builder now have grounds to sue you for benefits and maybe a pension plan because you don't like haggling?
Anyway I think price negotiation is a bad criterion to use. It is neither necessary nor sufficient to prove anything.
... But not detrimental to your ability to find other ride-sharing apps, or non-app methods of discovering customers...
You have satisfied all the criteria for self employment:
- The handyman can build their clientele - they are free to select whichever proposals interest them without restriction.
- The handyman can set their own rate - there is a free market of offers and proposals in which the handyman can freely make bids without restriction.
- The handyman is free to set terms and conditions - they can negotiate with a potential client to find a mutually agreeable situation.
> Uber isn't entirely different (it just simplifies the process).
It is entirely different. It "simplifies" the process by removing all of the criteria needed to be self employed:
- There is no free market of proposals. Uber sets the rate and the clients and drivers are both given the choice to take it or leave it (there is no possibility for the handyman to set their own rate). Clients are not permitted to select drivers and drivers are not permitted to select clients (there is no possibility for the handyman to build their clientele). Drivers are forced to accept rides or accept harsh penalties, like bans.
- Uber sets the terms and conditions. Both the driver and the rider are given a take it or leave it deal. Further, the driver isn't even aware of the full terms (destination, route) when they take the ride.
For Uber to be comparable to your example, it would have to allow drivers and riders to post proposals, set their own terms and prices and freely select from available offers without penalties for refused proposals.
Drivers are free to accept or decline any ride requests around them. How is that not a free market of proposals? Pretty much every driver I met used multiple applications, Uber, Lift, Juno. I don't know whether or not any Uber drivers would stop for someone just flagging a cab on the street the old fashioned way.
> Uber sets the terms and conditions
There are always terms and conditions. If your handyman needs to do something to your power circuitry, he had better be a licensed electrician. The catering that puts icing on your cake, better pass a health inspection. And your cab driver better have a driver's license. All of these are pretty much take it or leave it restrictions.
> it would have to allow drivers and riders to post proposals, set their own terms and prices and freely select from available offers
No taxi service I know of works this way. Because you want your fares to be at least somewhat predictable and your incentives are aligned very different from driver's incentives.
* You submit a desire to build a shed to a market-making company that controls much of the market
* The market-maker sets a price you will be billed
* The market-maker alerts nearby builders of a construction project
- without the location
- without the project cost
- without the project plans
* A builder (capriciously) clicks "accept project" and travels to your building site
- upon arriving the market-maker discloses to the builder the project cost and plans
- if the builder declines to implement the project at the dictated cost, the market-maker might penalize the builder and/or exclude them from the market-Mobile users
On what basis should someone presume to contradict the builder's calculus on this kind of tradeoff?
That some people are willing to participate in this zany scheme doesn't mean the court necessarily ought to view them as non-employees.
Were there a bidding process with a reasonable and sufficient amount of transparency to the worker--what and where exactly is the job, what does it pay?--then the scales could tilt towards contractor-dom.
I don't think anyone seeks to apply such a test; the lousiness of the arrangement is incidental. I had attempted to argue that the mere fact that workers knowingly take a questionable or even bad deal does not mean they are contractors. The legal status of employee vs. contractor does not hinge on that.
As described by the court, the driver is not told in advance where the customer is going. They are told exactly how to drive there, and the rate is decided by Uber.
It would be the same as you saying "I want you to build something on my site. Bring your hammer, tools and materials. Call me to find out where. I'll pay you about $20/hr"
Uber just found a way around local labour (and tax) laws and a European government, who's getting the downside of the tech company but no fiscal or technological upside, stepped in.
The existence of Yelp isn't evidence that building contractors are employees, it's the opposite. Actual employers typically don't rate their employees because they're not interested in having the best ones poached by competitors.
> Actual employers typically don't rate their employees because they're not interested in having the best ones poached by competitors. "Employee of the Month" posters around America beg to differ.
"Employee of the Month" posters are hung inside your own offices rather than anywhere a competitor would be likely to see them.
> In this case the drivers who provide the service are expected to come back, hence the vetting and rating. It establishes a relationship that extends beyond a single trip or "job".
The relationship between the driver and the rider generally doesn't extend beyond the single trip. They'll probably never see each other again. The relationship between the driver and Uber may continue, but so does the relationship between a plumber and Yelp.
It seems like you're arguing that eBay sellers should be considered the employees of eBay if they do most of their sales through eBay.
Uber pretends to find clients for contractors but treats them like employees due to three proven powers they hold over drivers: the power to give instructions, the power to control the execution, the power to sanction non-compliance with the instructions given.
Yet sellers are not employees. Your hue and cry that it is different does not compute.
In fact, you see this degree of control or more over participants in every market, forum, or platform operator, Craigslist, Facebook, Google, the list goes on. Just because driving a car seems different does not make it actually different.
I'm giving the context of the French legal case, you're arguing from an American market stand point. Yelp or eBay are barely blips in France, Lyft doesn't even exist. Maybe Uber drivers are contractors in the US, but not according to French laws and market conditions as proven by the court decision today.
Yelp doesn't hire the building contractors on its users behalf.
It's irrelevant why a government would act, political or fiscal reasons are always part of it, and protectionism. This doesn't have bearing on whether it is making sense or being illogical.
Because this is what employment typically entails.
Why? In America, there are tens of millions of people who work more than one job. They're still employees; just employees of more than one company.
Fred's Plastic Fork Factory can't tell me I can't moonlight at Alice's Diesel Cafe and Firing Range.
https://www.shrm.org/resourcesandtools/legal-and-compliance/...
not simultaneously, or even interleaved in 30 minute increments.
However, if the work is part time, employees can’t be restricted from working at another part time job, unless that job is for a direct competitor of the employer, in which case the restriction is sometimes allowed. (The idea being there could be a conflict of interest or loyalty.)
In any case, I read in Le Monde this morning that this recent decision by France’s highest court may mean that Uber will just stop doing business in France (although it’s too soon to know for sure).
Here’s the link to the article in Le Monde for those who read French:
https://www.lemonde.fr/economie/article/2020/03/05/pour-la-c...
Edit: Punctuation. Also, the article is behind a paywall. Sorry about that, I didn’t notice, as I have a subscription.
And let the free market compete for drivers by allowing other "gig-economy" companies to not have any of those restraints and seeing which company attracts drivers and which one dies.
They aren't clients, they are the "platforms". The clients are the people paying, not the people collecting.
You can choose to drive for other platforms today, you can directly engage customers ( uber drivers in my country occasionally ask you to cancel and pay directly) all of this would be illegal if they are employees.
This is not true. There are plenty of professions where employees bring some or all of their own equipment.
One colleague of mine did end up using his own server to run daily data processing and numbers crunching jobs for work though. It also served the internal analytics web UI. Apparently went on for years.
I was definitely an "employee", if anyone is.
Crucially, this meant that I had to work the hours specified by my boss and make whatever deliveries he specified during that time period, else risk being fired.
In my opinion this was a very sensible arrangement. It was a good job and paid my college tuition. And pizza demand varies widely from time to time. It would be silly for the company to maintain a fleet of cars large enough for peak demand and then leave them in storage most of the time.
I've also worked as a software engineer, on salary, with a contract forbidding concurrent employment elsewhere, but done all the work on my own computer.
In light of the above, I don't think ownership of equipment is necessarily a meaningful consideration.
Whether or not Uber drivers fall under current legal definitions of "employee," I think they obviously do fall into the common sense definition that should be regulated under labour laws.
Reality doesn't fall neatly into categories, which is why laws tend to have tons of details and exceptions. Some labour is day labour, piecemeal, etc. Labor laws do deal with these, they now need to deal with "uber-like" arrangements.
Now id just wish law makers wake up and regulate paypal et al as banks.
Anyway, even the banking circa 2008 story is not simple.
The banking "regulators" in action at the time were central basically two sets of institutions, with kinda unrelated goals. The first & primary is "central banking," which uses banking regulation and stuff to stabilise currency value (inflation targeting). The second institution is things like the SEC,"consumer" protection against fraud.
The reason the currency regulator(s) get all the attention, independent authority and such is monetary history. Currencies crashed a lot, even gold & gold standard ones.^ In recent decades, this is rare. Even during the crisis, we saw very little hyperinflation around the world.
Maybe they shouldn't have this mandate. Maybe different monetary policy would be better. But, I think it's hard to deny that the big-daddy financial regulators (central bankers) do the job they were built to do successfully... currencies are stable, even under very large debt loads.
The job you give the regulator matters.
^yes, yes, controversial.
Because almost every 1099 contractor is restricted in the ways listed.
For example, I was doing work for a Digital Marketing company as a software developer.
I could not:
1. Take their clients 2. I had to accept their rate or just decide to not work with them 3. I accepted their terms and conditions for jobs allocated to me from them
#2 and #3 seem to be more of an issue of negotiating power, rather than reflecting whether or not I am self employed.
And #1 seems to be up to interpretation of "what is a client?"
If I drive for Uber, Lyft, and whoever else wants my services, am I not building my clientele?
Couldn't I also moonlight by offering direct driving services to other clients I source on my own?
In the ride-sharing case, my clients just happen to be large publicly-traded transportation networks that I sell my services to.
In my case with that digital marketing company, I was not restricted from developing for other companies simultaneously.
This is where some laws confuse me. They seem open to the interpretation of the day. But perhaps that's the best that lawmakers can do...
Similarly, many nannies and cleaners are mis classified.
I seriously doubt you, as a driver for Uber or Lyft, could legally make deals to drive people you find via your work for those companies, outside being assigned with the apps for those companies.
Anyone know what the contract with Uber/Lyft says?
> Requesting a specific driver
> The Uber app cannot match you with a specific driver.
> When you request a ride, your app sends your request to nearby drivers to pick you up at your pickup location.
https://help.uber.com/riders/article/requesting-a-specific-d...
I seriously doubt drivers are allowed to make side deals with passengers.
A reasonable court will see this business model as what it is: a way to dodge labor laws.
Well it isn't a personal opinion is it? The court presumably knows what the legal criteria for self-employment are. Unfortunately, the single page lay summary presented as TFA doesn't go into detail as to chapter and verse of the definition, but as it is the high court I think it's safe to assume they have it right.
EDIT: more detail https://www.courdecassation.fr/jurisprudence_2/notes_explica...
To wit:
====
The criterion of the link of subordination breaks down into three elements:
- the power to give instructions
- the power to control the execution
- the power to sanction non-compliance with the instructions given.
As for self-employment, it is characterized by the following elements: the possibility of building one's own clientele, the freedom to set prices, the freedom to set the conditions for the performance of the service.
====
By these definitions, it does seem clear that the Uber-driver relationship is one of employment.
By the way, the take-it-or-leave-it offer with dictated pricing is a really inefficient way to reach a market price. The driver logs off because they can't decline too many times, then there are less drivers, so the rideshare app has to raise prices, but then the drivers nearby are no longer online.
> Its drivers are allowed to deny a ride, and can see the cost upfront.
Drivers can't deny too many rides (as a self-employed person can), or they are penalized by Uber.
But that's not a good analogy to Uber either. With Uber, neither the customer nor the driver sets the price, Uber does.
Handymen, cleaners, developers, hairdressers etc can (and do) establish relationships outside the "advertising platform" and can find a meaningful number of new clients (and total $) through word of mouth.
I'm not sure what the situation is like in France, but most Uber drivers I've seen have the Lyft app open at the same time. It seems pretty trivial to download another app and use both at the same time (easier than almost any other freelancer finding more sources for work).
I mean, imagine if a McDonalds worker could just say "I don't feel like working for $10 right now, I'm going home!", and then just leave in the middle of a shift. Then the next day he sees that Burger king pays more, so he goes and work for them that day for a couple of hours, after which McDonalds increased their rates so he goes back there and work a few hours. Sounds like insanity to you? Well yeah, because it is insanity if employees could act like that!
Uber drivers are not employees, end of story. Uber doesn't have any power over them as is, normal workers have a contract which is worth a lot to them, you have no such contract with Uber as it is trivial to get the permit to drive for Uber, Uber drivers are not afraid of Uber suddenly firing them, they can go in and out of their role how much they want.
At least in California, driver pay, and what the customer paid are decoupled. There is no more "surge" per say, it's just a dynamic price for the user, which might be completely different than the one the driver has.
In Europe they still operate at a standard of 25% cut.
> Then the next day he sees that Burger king pays more
Why would it be in the interest of Burger King to do that?
Where I drove for Uber, there were five platforms. But Uber had 90%+ of the rides. In a year, I think I got one Lyft request, and nothing from any of the others.
If there were plenty of customers on all platforms your statement might be valid, but that's not the reality.
Generally speaking, Lyft costs more than Uber, but you get a better class of passengers and a better class of drivers.
Prices for the ride are always changing. Uber usually has lower per mile cost, while Lyft has a bit lower minute cost. This does not affect switching costs.
The middle-man (Uber) does. The middle-man decides what tools (car models) the provider may use to do it's work. The middle-man unilateraly sets the Terms & Conditions for both the customers and the providers, without any room for negotiation. The middle-man decides which providers may or may not get the gig. And the middle-man can cut anyone out of the platform at any time without giving notice or justification.
In your example, you fix the price. The provider (handyman) may use the tool of his choosing and, if things go well, the provider is allowed to give you his business card, and you to employ his services directly in the future.
The platform really is just a medium, just like the cork panel at your local supermarket, with an extra mediation capability / service.
There's no method whatsoever in Uber for drivers to actually set their prices, which is a key difference.
The nature of whether somebody is self-employed rather than the employee of another should be very simple. It should have nothing to do with the specific items of negotiability or having or lacking information, as long as the unit of working relationship is one job with a deliverable, the taking or refusal of which is freely chosen, and there is no expectation that either side will work together again. I simply don't see how such a relationship can be considered employment in an intellectually honest way.
Now on top of that you can regulate how such marketplaces should work, like how states make Amazon and eBay collect and remit sales taxes, and have fair advertising laws, but that's a separate concern from the employment question.
Technically, this problem doesn’t apply to Uber in Austria because only rental car companies are allowed to provide this kind of service. The problem here rather lies with the cheap labor those rental car companies are employing (reportedly, those engagements sometimes border on modern slavery).
I had a similar situation in the US when I was a contractor many years ago; during periods when one client had me working on a large project I wanted to focus on, I had to take on a couple of token tiny projects periodically to keep my clients from getting into trouble with employment agencies.
I agree with the end goals of those rules but as a generously-paid technology consultant, I was in no danger of exploitation and it was just added hassle benefitting nobody.
In Uber world, you get banned of the site.
> In addition, if the driver has declined more than three rides, Uber may temporarily disconnect the driver from its application
I think you missed the part about subordination. Yes, you could have a service like Uber where you are still your own boss. ( Curb, for instance, is the response from the traditional taxi drivers )
But in the case of Uber, I tends to agree that they get away with a lot of subordination, without giving away work contract.
A valid interpretation, which would be consistent with the court's decision, would be that you are the employer, the builder is you employee.
In your scenario, you are the craftman’s direct client, a contract will be signed between you and them, not with some wrapping entity.
If you need additional work on the shed you can call that same person, renegociate a price for the additional job and continue the relationship. Same if you have claims, if you need to cancel the job for any reason for instance. And you can both agree to renegociate the contract under your own terms.
That direct relation is only a part of the whole picture, but I think it’s a significant point.
If that handyman site of yours set the price for the new shed, and also paid the workers who came to build the shed, it would be perfectly rational to call that site a "construction company".
There's some tradition to it as well. This varies a lot between countries, but in many places taxi drivers have historically been self employed all the way back to horse carriages. So there's that, too.
Should you pay your Uber driver directly, or should you negotiate the fare with them, the situation would be altogether different.
That said, if you put an ad to build a shed for £100, expect a low quality result. Of course you can put all kinds of criteria but at some point you will either get screwed over or nobody will answer the ad. I also doubt that there are many people working on such gigs in a sustainable manner, even if the criteria are proportionate to the price.
None of that applies to drivers who can either choose to take what they're given or quit.
I can't find a reason why that the court's criteria isn't sound. Can you find one?
Your shed builder example seems like it could apply to almost any kind of job. By that logic, absolutely no one would be an employee.
Or put differently, what would stop me from firing all my employees and contracting them as freelancers instead?
You forgot to disclose the fact that they are getting many perks like properly funding their public pensions while working for Uber AND getting access to regular unemployment funds. The advantages absolutely out-weight the drawbacks in France. And they are guaranteed a minimum wage, legal contract framework which means that Uber cannot fire them on the spot and so on and so forth. The only loser here is Uber, not the driver, if Uber were to chose to continue doing business in France.
First, you say "more rights" as if that was just a detail. But paid vacations, sick/paternity/family leave, minimum wage, pensions, social security, right to strike, unemployment benefits and the like are not just a minor thing.
> If you try contracting as a coder for example, you are likely to get reclassified as an employee.
I have worked as a freelance through some brokerages/exchanges (e.g. Upwork) and there you set your own rates, your own conditions, and your own clients. I think it's a pretty different framework than Uber.
The issue is not brokerage/exchange or not, it's who controls the terms of the labour done.
You are still pretty likely to get pursued by the tax services for 'freelancing'. At least where I live. I hope you manage to slip through the net though :)
I do not know about France, but in Germany, employees only pay half of their healthcare insurance fees. And only their wage is subject to the healthcare insurance "tax", while self-employed people need to pay the tax on all incomes, including investment incomes
This is not the case in France. Self-employed people still pay personal income tax and/or a tax on company profits.
The increased taxes on employees as compared to the self-employed is mainly due to paying for the infrastructure and cost of providing extra benefits to employees, like unemployment insurance, vacation pay, better pensions, etc. The term for these taxes are “charges sociales”, meaning they’re used for providing social services. The increased taxes are not used for building roads, paying for the armed forces, or things like that. Other taxes pay for that.
If everyone in France were self-employed, a very few government services providing social services (like Pole Emploi) might cease to exist, but most government services would be entirely unaffected.
From what I can gather off frenchproperty.com the 'social charges' tax rate employees pay is very very big (29% employee, 50% employer, total would be something like 65%) while self employed pay 12% to 23%.
Exactly how much someone will pay in social charges is complex, because it depends on their line of work, how their business is set up if self-employed and how much they’re making.
But here’s one example:
A typical white collar salaried employee, for example a computer consultant, who’s netting 50000 euros will be costing his employer 100000 euros after social charges are taken into account. This worker will be paying into two different pension plans and is also paying for unemployment insurance.
A typical white collar self-employed contract worker who’s billing 100000 euros will have perhaps 5000 euros or so of business expenses and perhaps 30000 to 35000 euros of social charges. It varies mostly on how good their pension plan. So they’re netting 60000 to 65000 euros.
The difference between these two cases is mostly that the salaried worker (currently) has a better pension plan and also has much better unemployment insurance coverage (but which is also expensive).
If you’re not worried about finding work, being self-employed is a bit more profitable in this case, but not hugely so.
The 12% and 23% numbers that you saw is for a what’s called a “microentreprise”. In that case, the social charges are based on total income, not profits (so no deductions).
12% is for when you’re selling goods, not services, and you don’t get to deduct the cost of the goods.
23% is for when you’re selling a service, which is great, but you can’t bill more than 70000 euros (not counting sales tax) in a year and and still be a “microentreprise”.
The idea of the “microentreprise” was to allow very small businesses to get started, with lower social charges and much simple accounting procedures. It’s great for part-time or side projects or low paid work, but it’s not suitable for full-time well paid work.
Additionally, while there are currently 42 different pension plans in France, depending on your line of work, under Macron there's an evolution towards having just one government pension plan for everyone. The new system will be based on building up points which can be cashed in on retirement. It will probably start for those who retire starting in 2035. So in the future the pension plan will be the same for everyone, self-employed or employee.
Throughout your career, you build up the right to a certain pension in each of the different pension plans you’ve been paying into. When you retire, those who are still working and paying into that plan pay for your pension (as you did when you were working).
I can’t vouch that it works this way for all 42 different plans, as I haven’t checked, but I’ve worked both as an employee and as a freelance consultant and it works that way for the 4 different pension plans that I’ve paid into. And, as I said, in the future there will be only one state plan for everyone (plus various private plans as well, of course).
So I see no problem with everyone in France being self-employed and France continuing to pay out pensions.
I agree with the judge that Uber drivers have far too little control over their situation to count as self-employed. They're entirely dependent on Uber.
> Moreover, declining rides won't negatively impact drivers as much as it did before.[0]
Of course, won't impact as much still means impact.
[0]: https://mashable.com/2017/08/22/uber-drivers-ride-flexibilit...
Immediately I'd seem to agree with this statement. I think of typical self-employment businesses; hairdressers, freelance developers, etc and this seems to apply. You can set your own rate and your own terms, even if those may kill your chance at being competitive.
But if you think deeper into this, then this criteria isn't always true.
Here's a scenario: I publish an ad on a handyman site asking for a new shed built for £100. People can place their interest and their proposal. The price is fixed at £100, and I may set other terms and criteria. Nobody is going to argue that the builders are employees of the exchange site. Uber isn't entirely different (it just simplifies the process). Its drivers are allowed to deny a ride, and can see the cost upfront.
Really the difference in these types of self-employment seems to be that the customer approached a set of potential suppliers, rather than vice versa, and the customer set the terms and the self-employed get to accept/deny. In the typical scenario (hairdressers, etc) they set the terms to potential customers who get to accept/deny.
I don't agree or disagree with the classification of Uber drivers as employees, I just don't agree with the criteria of the court in this case.