A couple of years ago, the Quebec government introduced additional restrictions on ridesharing companies. Uber got up on their soapbox and said they were pulling out of Quebec. The government called their bluff and basically said "Okay, bye" and Uber backpedaled. I wouldn't be surprised if the same thing happens here.

This happened in Sep 2017. Then, the transport minister for Quebec changed in Oct 2017, and Uber said later in Oct that they would not pull out because they saw an opportunity for constructive dialogue with the new transport minister. By the time Bill 17 was passed in 2019 and Uber became officially legal beyond its pilot project, taxi drivers were protesting the Quebec government's actions.

https://montreal.ctvnews.ca/uber-is-officially-allowed-in-qu...

I wouldn't describe what happened in Quebec as a loss for Uber.

Maybe in normal times, but in pandemic times who knows? Most things are shut down right now, add uber/lyft to the list and see if people actually care.

You're assuming competitors with actually viable business models weren't waiting for exactly this opportunity. Spoiler: https://www.cnbc.com/2020/08/19/uber-and-lyft-competitors-pr...

The State of California doesn't care about workers, they care about the tens to hundreds of millions of dollars they want from payroll and unemployment taxes, in addition to revenue from automatic withholdings for people whom would otherwise be below the reporting limit.

I think it's reasonable for a government to crack down on businesses where the entire operational structure is designed to subvert that government's tax code and regulations.

I swear people forget how Uber got popular in the first place.

By providing a service that was more convenient, safer and affordable than the alternatives protected by regulatory rent-seeking.

Playing devil's advocate here, but how do you think they managed to make a more affordable solution? If you think it's entirely due to their technology, I'm afraid you'd be mistaken.

Not obvious, but entirely plausible. I'd be curious to see what a more sustainable pricing would look like on the consumer's end.

More than plausible. The fact that Uber does not generate profit means they are effectively subsidizing rides with VC and IPO funds.

Lol. Haha.

You mean, overcrowding a market with underpaid positions, sold with lies and marketing to make them sound better than they are, to force people with full time jobs out of work so that people could get a ride in a vehicle with no safety, security, (or originally) background verification while doing all they could to cheat regulations, driver and user privacy, tax laws, climate change, and eventually, now, rent-seek, to boost stock prices to pad Vegas parties and investor portfolios.

Modern ride sharing is not sustainable, environmentally friendly, or a 'job' and this doesn't exempt the bad behaviors by taxi companies, but understand this is the end destination of capitalism invading a regulated economy.

Who do you think ends up paying that money? Uber/Lyft? Not a chance! This cost always gets passed down the the individuals in the form of smaller cuts of the pie.

SCOTUS came to a different conclusion in Gregory v Helvering.

https://en.wikipedia.org/wiki/Gregory_v._Helvering

Government doesn't exist to collect taxes. They are there to provide governance. Taxes are a necessary evil that should be kept to a minimum to provide the service of governance.

If someone can come up with a legal operational structure that gets around taxes then that the government didn't do its job.

It's only easy to get around taxes when the taxes aren't closely tied to the service the government is providing. i.e. when you taxing one individual or business for a service provided to other individuals or businesses.

> If someone can come up with a legal operational structure that gets around taxes then that the government didn't do its job.

Right, they passed a law, AB5, to better do that job.

Wait, the SC ruled in favor of the government in that case, overruling the district court.

"The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted."

From the ruling that the SC upheld:

"To dodge the shareholders' taxes is not one of the transactions contemplated as corporate "reorganizations."

And from the SC ruling:

"The whole undertaking, though conducted according to the terms of [the statute], was in fact an elaborate and devious form of conveyance masquerading as a corporate reorganization, and nothing else. ... [T]he transaction upon its face lies outside the plain intent of the statute. To hold otherwise would be to exalt artifice above reality and to deprive the statutory provision in question of all serious purpose."

If there's no business purpose beyond tax avoidance, the government can indeed hold you to the higher tax rate. I don't think that's what happened here, i think there are legitimate non-tax reasons for Uber/Lyft's structure, but it's not a completely unreasonable take to disagree with that.

And even if not, the government is free to change the law to fix things, which it did.

They care about the burden these employees put on the system when they get sick or injured which costs tax money. Most people don't use Uber or Lyft, why should they have to subsidize these companies.

That sounds very good.

Those things seem like reasonable things for a government to care about.

Drivers choose to make their living with Lyft and Uber. California is starting to feel the repercussions of their far left policies. It hurts consumers (fare prices rise), stifles innovation, pushes entrepreneurs out of the state, and the irony is it ended up hurting the drivers.

Lyft _chose_ to hurt the drivers instead of complying with the law.

This is a transparent ploy by Lyft and Uber to try and extort the state into changing the law by holding their drivers' livelihoods ransom.

Lyft isn't a charity and should not be expected to operate in an unprofitable market.

Neither Lyft nor Uber has ever made a profit. Drivers aren't the only ones being fleeced.

Or perhaps it's basic business and economics. Lyft and Uber's business is built on the assumption that drivers provide on-demand transportation. The business model doesn't work if the workforce is not also on-demand. Instead of vilifying companies, perhaps it might be beneficial to understand the business aspects of decisions instead of jumping to conclusions based on knee jerk emotional outrage.

Did their business model work even when their workforce was on-demand?

California's far left policies?

When did California eliminate private property? When did it hand over the means of production to the proletariat?

Last I checked, capitalism was alive and well in California, which is the dearly beloved home of the most successful capitalist entities and richest people on the planet.

If California's policies really were far left, all those companies would be owned and run by their workers, and no one would be richer than anyone else.

But that's not California, is it?

Republican party is completely dead in California. Last time they had some power they kept manufacturing crises and shutting down the government. After Trump they've gone all in on the national Republican party's white-hot hatred of the state.

In Portland, Radio Cab has an Android/iOS app. I switched to them once they modernized. In this case, Lyft/Uber caused taxis to improve infrastructure. That's a win.

Competition tends to force organizations to evolve to meet the threat. That is, unless some government intervenes in the market, distorting the effect. Then you get a distorted market with inefficient allocation of resources.

Seems to happen quite a bit in monoideological areas.

Who forced Lyft to shut down? Was it the state, or did they freely choose to cease operations? Obviously, spin will characterize this in any way that's advantageous. But nobody 'forced' Lyft to close.

Their business model is on-demand transportation. The business model doesn't work if the workforce is not also on-demand. I don't think that's spin, but maybe society decides that we don't like on-demand businesses.

The state doesn't need to allow a business to continue just because they invented a business model that requires exploitative labor practices. Whether Lyft can exist is not an aspect that enters into labor law.

The business model doesn't require exploitative business practices; Lyft has chosen their prices, and chosen what they'll pay their drivers.

If prices were to go up, sure, Lyft would have less business, but presumably there is some price point that pays drivers enough and also makes the economics work for Lyft.

The statement was "The business model doesn't work if ..." and I'm saying that doesn't matter. Whether it's true or false doesn't enter in to the debate.

> Whether it's true or false doesn't enter in to the debate.

Yes it does matter in the debate.

Because when we are passing laws, we should care about both the pros and the cons of a particular policy.

You can feel free to say that the pros outweight the cons for these laws, but you still need to recognize that shutting down ride sharing is a con of these laws.

Those are the drawbacks of these laws, and it is OK for people to care about these drawbacks, and bring them up into the debate.

Uber operates in other countries which require them to use employees and not contractors (e.g. Germany), and it works fine. So it certainly isn't impossible.

That's their rationale for shutting down, which is still a choice they've chosen to make. Basically, they're going on strike as a corporation.

Not saying Lyft is without fault, but this argument excludes all possibility of provocation, which is reductionist.

McDonalds provides on-demand fast food and its employees are not independent contractors.

There are peculiarities to Lyft and Uber’s business model, being on demand is not one.

To be equivalent, you'd have to say that McDonalds is able to provide food anywhere at any time. My house at 6am, downtown at lunch, late night at 2am. In fact, the only way to do this is to use Uber Eats or something similar. And no, delivery drivers have never been that ubiquitous.

Your definition of on-demand is more like a bus or train, not lyft or uber. i.e. you have to actually go to a bus stop or train stop, which could be out of the way, and you have to deal with their schedule. That's hardly on-demand.

Uber and lyft's business model is absolutely based on being on-demand. I would take a bus or train if it was even close to as convenient.

They also work a schedule and do not get to work at BK and Mcds at the same time waiting for the next order.

> The business model doesn't work if the workforce is not also on-demand.

Have they tried it to confirm it 'doesn't work'? Maybe rideshare companies need to reduce their cut, and start putting more of that money into the driver's pocket. Doesn't mean it can't be a profitable business, though possibly low-margin. Have they tried paring back development costs, marketing costs, etc?

Converting someone to an employee means a lot more than just paying them more. There is entirely new infrastructure that has to exist now.

Lyft already has the infrastructure in place, as they already have employees.

Are you implying that Lyft is going to give every driver a salary, or are you intentionally being obtuse? This is like saying "you should be able to make dinner for a restaurant, as you already have a kitchen"

They're already losing money as is...

Uber and Lyft aren't profitable, never have been and may never be. The idea is that if only you build a strong enough brand and network, somehow there will be money in it.

In the meantime, they'll operate at a loss. If they leave the California market, they'll simple lose money slower.

I never understood the way Uber wanted to win. There is essentially zero moat, especially because the drivers are not employees in their model. So even a small competitor can just slightly pay more to the drivers, and cost slightly less to the riders, to grow. The only way out is replacing the driver, and protecting that technology. I don't see either of that happening. If technology gets good enough, Tesla/GM/VW will have it too. And they have a cheaper access to cars.

There is no evidence that the business model doesn't work, otherwise traditional cab companies would've never survived. Rideshare companies undercut traditional cabs by operating illegally, but that doesn't mean a regulated model can't work.

Does the cab model not work?

Taxis are either independent contractors driving their own or company cars and getting most or part of the fare, or employees paid by the hour who are pushed to get a particular revenue per hour. Yes, the contractors will now have to be employees in California, so that model is gone there.

The former tends to adapt okay to predictable demand, the latter tends to not at all.

Before Lyft and Uber, my usual wait time for a Taxis in the Seattle area was on the order of 45 minutes to an hour. Since the rideshare companies became common, the wait time for taxis has gone down, but its still longer than the wait for Lyft.

There's actually jurisprudence that taxi drivers can be employees, not independent contractors, even when they are working for fares and lease the vehicle. See Linton v. DeSoto Cab.

The state made their business model illegal. Yes, technically that’s not the same thing as shutting them down, since they could have switched to a different business model, but it’s a distinction without a difference.

They can still run the same business model, they will just have to increase employee compensation (and fares).

This is like saying that raising the minimum wage will drive McDonald's out of business. At the current prices, sure, but McDonald's will raise prices 10% to compensate (wages are not 100% of the cost of a burger) and keep on trucking.

Their business model was illegal before they formed the business.

I don't know whether that's true or not, but I don't think it changes my point.

The Dynamex Decision [0] has held that the State of California has always considered drivers to be employees.

[0]: https://en.wikipedia.org/wiki/Dynamex_Operations_West,_Inc._...

It was made illegal by the law that was just passed. You can't try to claim it was illegal beforehand in good faith

California literally paid billions in unemployment to rideshare drivers during Corona, funds that Uber and Lyft didn't contribute a cent to, but you feel it's sensible Republican policy to declare "next year, we'll do it all over again"?

Lol. Do you think they'll pay more or less in unemployment benefits now that Uber and Lyft have left entirely?

Those people stopped working because California's government prevented them from doing so. They're entitled to be compensated.