A more cut-and-dry example might be clarifying: if there were a ballot initiative to outright ban strip clubs, and a strip club sent a memo to its staff, correctly noting their jobs would be gone if it passed, would that be a violation of this statute?

They could either treat them as employees and provide benefits that law requires, or make drivers to be truly independent.

They are threatening to leave California, but that's similar to baby making a tantrum to get what they want. While I don't use their services, and don't care about them leaving, I really doubt they will leave California, because of AB5.

The failure of Prop 22 will cause a massive disruption of an existing marketplace. No matter what you think of the morality of the existing setup, the failure of Prop 22 will force some large structural changes to how it operates.

It seems likely that this will cause ride-sharing not to be economically feasible in rural areas where per-driver utilization is low.

Operating in SF and LA will likely remain profitable but many drivers will be forced, by AB5, to stop driving. This will increase wait times and increase prices and cause lower ridership.

It's very possible that Uber/Lyft will decide that the overhead of being an employer is not worth the reduced revenue, it's not like they're making a lot of money in the first place. It's also possible they'll decide they won't want to dilute their brands by offering a service which makes you wait 7 minutes for a ride.

It is, of course, also possible that they'll decide to send a message / throw a tantrum, but your comment implies this is the only explanation. It's definitely not the only possible explanation and I'm not even sure it will be the most likely explaination.

We had Uber for a short period and consumers loved it. The taxi medallion cartel got together and pressured the Danish government to push on Uber. The government complied with hefty fines. Uber left.

Now things are back to what they were: hundreds of taxis idling somewhere in Denmark to protect the cartel and no one taking taxis because it's literally 50 dollars for a 15 minute ride. It sucks. Everybody hates it except the taxi services. I really hope this isn't what happens in the States.

On the other hand, Japan has amazing taxis and they're everywhere all the time, AND extremely affordable. Japan also has very strict labor laws, and becoming a driver is not the easiest thing in the world.

Here's the thing... they're not making _any_ money in the first place. Every single segment of Uber's business is loss-making. So AB5 will uh, force a loss-making, VC-capital-burning, parasitic business to be slightly more loss-making at the cost of providing a living wage to drivers?

The whole situation is frankly absurd.

Uber/Lyft have found a loophole that enables them to skirt by one of the "Riders Must Be At Least This Tall" measuring sticks, and the law basically says: No, you actually have to be this tall, sorry.

I don't see what the issue is.

If I want to hire teenagers on my street to mow the lawn or babysit the kids, should I be forced to pay them benefits as well?

The alternative is the way California is heading: instead of taking care of people's needs directly, it's regulation after regulation to lock everything up so that only entrenched corporations with the scale to afford all these benefits can afford to operate.

> The alternative is the way California is heading: instead of taking care of people's needs directly, it's regulation after regulation to lock everything up so that only entrenched corporations with the scale to afford all these benefits can afford to operate.

These companies spent almost 200 million for this proposition (highest in California history, and since it's California - highest in all of the states). They are not poor mom and pop shop.

The issue is that uber and lyft will likely shutdown in much of california.

I guess you can think that this isn't bad, if you want. But I can assure you that many of their drivers, and customers, do not agree with you.

> Making certain business practices financially unsound is the point.

Ok, fine. But most of their california drivers probably disagree with you that it would be good for them to be fired. Most of them probably do not want to be fired. Which will likely happen.

I'm not sure about that: https://www.cnet.com/news/uber-drivers-sue-they-say-company-... and who cares about the customers? Many of their customers wouldn't have problem if Uber was using a slave labor as long as price is low, and ultimately that's what it is about.

Well the customers do. Most people are customers are something.

And most people would say that the opinion of customers matter.

If your opinion is "I don't care about the opinion of people who buy things", I guess you can feel this way. But most of society and our legal system regarding businesses is targeted toward consumer welfare.

They're currently unprofitable in the same way that Amazon spent a decade being unprofitable; every cent was invested back into growing future revenue. It's a little different; if Uber flipped their switch and started taking a profit Lyft would swoop in and steal away market share. But the unit economics do work out, I'm claiming that once prop 22 fails there will be markets for which the unit economics will no longer work out at all.

It’s like Walmart saying, “if we pay a living wage we’ll become unviable!” Well, maybe you should be. Maybe stuff shouldn’t be that cheap.

Have you even read their latest releases? Ridehailing in US as a singular unit is insanely profitable. The take home is incredible.

https://thespinoff.co.nz/business/13-01-2020/uber-is-a-case-...

Or they will have to make allowances for areas that have very low supply and/or supply that is very dispersed. For example, charging for some/all of the the time/distance from the driver's origination point to the pickup point. That will necessarily make ride sharing more expensive in those places, but that's because providing rides in those places is more expensive.

Another option that might work in tandem is to allow drivers to log in as a sort of "if the offer is good enough I'll take it" sort of tier, and then you might get a lot more people in rural areas signed in in that state, and while any one potential driver might reject, a lot more eyes might see it that wouldn't bother to have been looking before, and that might make cheaper rides more likely as closer people are logged in as potential drivers. It's worth noting something like this might also have kept Uber/Lyft from having to classify the drivers as employees in the first place, since as I understand it choice of work is a big part of why they didn't qualify as contractors.

> It's also possible they'll decide they won't want to dilute their brands by offering a service which makes you wait 7 minutes for a ride.

7 minutes is actually on the lowest end I've seen where I live, and that's in a metro area of ~250k people. Usually it seems to be around 15-20 minutes. Maybe it's just particularly slow around here, but my guess is that you don't get under 10 minute pickup times on average anywhere except for major cities.

Yeah, definitely. I agree that to make it work they'll have to raise prices. My guess is that they'll have to raise prices by so much that riders decide to just drive themselves. If drivers must be paid minimum wage that might raise the cost of a ride by enough that in some locations there is no clearing price.

> Another option that might work in tandem is to allow drivers to log in as a sort of "if the offer is good enough I'll take it" sort of tier

AB5 is strict enough that this will not save Uber. You are an employee unless "The person performs work that is outside the usual course of the hiring entity’s business." Though, they did experiment with this model [1] and I wonder why they decided not to pursue it. If they had allowed drivers to set their own prices that might have been enough to prevent AB5 from being passed.

> 7 minutes is actually on the lowest end I've seen where I live, and that's in a metro area of ~250k people. Usually it seems to be around 15-20 minutes.

Yeah, absolutely :) Sorry, I should have been more specific! In major cities it's usually something like 2-3 minutes, I would not be surprised if it becomes 7 minutes once prop 22 fails. Wait times in places which are not major cities will increase by even more.

[1] https://www.theverge.com/2020/1/21/21075062/uber-test-califo...

People complain that california living cost are so expensive, yet they vote for this kind of law.

No it won’t. Uber and Lyft will operate identical to how it is today. They will outsource the HR and employment issues to staffing agencies.

Drivers will simply have to be “employed” by one of these agencies and then go about driving the same way they are now. These agencies will likely allow their “employees” to drive for whatever companies the agencies have agreements with during their shift and call everything over minimum wage “incentive pay”.

Uber, Lyft etc will contract these staffing agencies and pay them per ride instead of the drivers and the agencies will passthru that income minus their cut.

If the employer has to provide benefits, those costs have to be passed on to the riders, even if there are drivers who don't need those benefits, e.g. because they get them through a spouse or a second job. Then costs increase even more and there aren't as many riders, which means there aren't as many drivers and even more lose their jobs.

How is a staffing agency supposed to solve any of that?

There's nothing about having a staffing company involved that forces drivers not to pick when they work or how often or where. When you're a contractor, your contracting company cannot enforce those things, however, when you're an employee, you absolutely can have those things -- or not -- at the discretion of your employer subject to the terms of your employment relationship.

All having a staffing agency involved does is force a minimum wage, and an employer-employee relationship. They, the staffing company, take on fares from Uber and disperse them across their drivers. They pool the fares to provide a minimum wage and benefits, and then anything else above that gets distributed to the driver who created the specific revenue as "incentive pay" in exactly the way the parent suggested. Or as profit sharing proportional to work performed.

There's nothing crazy or unprecedented about this.

tl;dr: The company contracting you cannot tell you when and how to work, an employer can -- but does not have to.

A staffing company wants to reduce the amount of unprofitable hours driven. To do that they have to restrict working hours. It's not guaranteed but a highly likely outcome of the set up.

Are you sure? Have you ever worked in a job at the mall that was relegated to telling you to "I dunno, why don't you come in when you're feeling pleasant or comfortable?" Similarly, airlines that schedule flight attendants don't tell them to come in whenever they want. You can fire people who are your employees, yeah? And you can pay people who outperform more.

Zero chance the bulk of the surplus gets distributed to the drivers. I know of a few New York medallion era brokers keeping an eye on the California market, and they aren’t doing it because they plan on passing along profits.

If you force them to a fixed hourly wage, you can't hire that person and still let them work those hours in those places, because you'd be paying them for 40 hours while they're still only working 10. So the now money-losing employee either gets a pink slip or has to work different hours.

Next, you provide incentive payments for drivers proportional to the extra amount they brought in above and beyond the minimum wage for the hours they drove, as a slice of the pool of revenues after subtracting out minimum wages and benefits. Then you stack rank your drivers at the end of each half, and fire the bottom 20%.

I'm not even advocating this approach, I'm just saying there are ways of incentivizing this that are shown to work. This part here isn't rocket science.

This is commonly repeated and there’s nothing inherent an employment forcing fixed hours or less flexibility. It’s false.

> many drivers will be forced, by AB5, to stop driving.

If it's "ride sharing" then the drivers were going that way in any case, so a lack of paying passengers won't stop them.

If a lack of paying passengers will stop them then they're not "ride sharing"; they're a taxi service, and deserve the associated legal protections.

I agree with the argument I think you're implying: there's a minimum level of protection that everyone should be afforded. Though your assumption that your employer must be the source of those protections seems unwarranted. If people deserve healthcare then surely unemployed people also deserve healthcare. If people deserve a minimum standard of living, some kind of minimum wage, then surely even the unemployed deserve that minimum standard. And once even the unemployed have these protections, what does it matter whether you're an employee or a contractor?

Why not attack the problem from that direction?

This is the workers' rights version of a gadgetbahn. I am arguing for universal healthcare and for central government to cover things like medical leave and childcare. As and when that's actually implemented, I might support some relaxation of the standards for when people are considered as employees (though I suspect Uber probably wouldn't care whether these people were classified as contractors if it didn't mean they were on the hook for healthcare and benefits). In the meantime, the laws that we currently have are that employers are required to provide these things; Uber needs to step up and fulfil their legal obligations.

FYI that is not my opinion and I never claimed any such thing.

Making drivers that take contracts from Uber employees of Uber is so unreasonable, that even in London black cab drivers aren't treated the same way.

By your logic that's not a threat, just a statement of fact that it would be a shame if the thing you care about were to be damaged/destroyed somehow.

If they were saying it would be a shame if something would happen to your precious belongings, and they were talking about regulations designed to stop electrical companies from starting fires, it would be completely kosher.

Wait… I thought Uber was in FAVOR of disruption? Will we see a "Venture funded firms against disruption" PAC next?

"It's good if I like it. It's bad if I hate it." There is no substance to it.

[0]Effectively banning Uber will literally kill people, for starters. To say nothing of the increased economic friction going back to the cab system.

The state is morally responsible for folks who cannot work, however, they don't have to achieve this responsibility by creating below-market-rate or otherwise crap jobs. They can achieve this responsibility through, for instance, basic income, unemployment benefits or a social safety net.

The moral responsibility of a state is not to make people work at all costs. It's to look after its citizens and to your point make sure they don't die. Americans tend to conflate the two but they are distinct.

Combining the two creates a weird world where the state needs to stay out of the way of individuals getting any job at all no matter how bad or underpaid, and that's not really the mission statement.

If you're talking about "killing people" because of drunk driving, I would suggest that there are plenty of other ways for folks to get home, between public transit, a designated driver, or yes, a taxi. I enjoy drinking as much as the next guy, but not having Uber isn't going to cause me to die. At some point personal responsibility comes in to play when the goal is to optimize for the greater good. I do think having Uber or Lyft is strictly better.

Drunk drivers tend not to only kill themselves. I'd also like to point out that your argument for 'personal responsibility' has a lot of similarities with the 'abortions would stop if people just exercised abstinence' argument. The flaw is the same: people don't act responsibly[0] and others suffer for it[1].

>They can achieve this responsibility through, for instance, basic income, unemployment benefits or a social safety net.

Those would be reasonable approaches but instead CA seems more interested in hacking a massively useful service into unprofitably. It's akin to pushing mass transit by bulldozing highways instead of building subways.

[0] A lot can be written about why people don't, but its demonstrable that lowering the barrier to alternatives decreases irresponsible behavior.

[1] If you consider abortion and/or drunk driving to be social ills.

I will very much give you this one, and that's the first thought I had as I was writing up my post. Still not entirely sure how to reconcile that tbh, and I tried to encapsulate that in "I do think having Uber or Lyft is strictly better."

It's a weak argument if you move from "people will die, to say nothing of the impact to the economy" — presumably, of using a different taxi app?

The strict adhesion to economics you're proposing would say a new marketing clearing price would be reached, not start making alarmist overstatements about what higher prices could imply

- If it can be achieved via such a simple change, then why wasn't it?

- Medallions and gig economy have vastly different incentive models, which tie very deeply with coverage and supply volume

- What of the countless anecdotes of taxi no-shows even after rideshare became prevalent?

- In most markets, it took a multinational giant burning through billions of dollars to get competitors to start playing catch up technology-wise

- etc

I'm not sure to what extent we can infer a correlation between the app-based aspect and DUIs there.

Though to be clear, I do think the app-based aspect plays a role. It's just that when I say "rideshare", I assume we are talking about the whole package as it exists in reality, as opposed to dissecting what aspects of Uber affect what types of statistics.

This seems a bit misinformed. The reason they stated for leaving CA is due to logistics, i.e. a company can't process hiring paperwork for hundreds of thousands of people out of thin air. A more apt comparison would be your state government saying you have 6 months to rebuild your wooden house with bricks or face exorbitant fines. In that position, it wouldn't be a tantrum for you to decide to leave said state.

Regardless, CA is a big market for rideshare, so even if they leave, Uber will surely come back to CA once they make whatever changes they need to their platform to conform with the local regulations. That's what they did in Austin.

That's a really good argument. Personally - and admittedly this is purely speculation - I think they would find some creative way to conform to the letter of the law without a drastic shift in business model. Someone elsewhere suggested, for example, something akin to an agency model, where they pay some amount to a sourcing company, and said company then retains a pool of workers that service requests from all rideshare and delivery apps. They could spin it into an opportunity to become said middle man themselves and profit from competitors and/or enter different gig economy verticals. Or they could settle for some middle ground with some loss of coverage but still more or less the same service. Or find some way to devour or partner with the taxi industry proper. Etc.

The thing w/ regulation and precedents is that it doesn't have to be Uber. If a precedent is set by any other company, your hypothetical scenario of risk to profitability profile would affect Uber regardless, so it doesn't seem in their best interest to just part ways with CA and call it a day.

On an opposing note, something else to consider is that the rest of the country (or the world, for that matter), may not agree with CA policymaking, especially as the CA political landscape drifts more and more towards the radical left side of the spectrum.

With that said, I have also read that Uber did do significant changes to its platform for the UK market (another place where there was an existential crisis for Uber). So platform changes are not entirely outside the realm of possibility.

"I don't really have a personal connection to this thing, pay much attention to it, wouldn't really care if it went away, but by God we need to set this rule I want to make it work exactly how I say it should. No, I haven't really studied it, I'm not going to rely on any data or "facts" or any of that nonsense, I'll only argue from first principles in a vague, hand wavy way. And I am not going to acknowledge any complexity the world, this is black and white and it will work exactly the simple way I say."

And then by the time it's clear what the result of this decision was, you've already forgotten about it because, like you said, you don't even really care that much if these companies stay or go, and by extension if these drivers can keep driving to earn money or not.

There's a great Mitchell and Webb sketch about the issues with leaving things be implicitly communicated rather than explicit. (NSFW) https://www.youtube.com/watch?v=VgX6JFoV0TM

And, if I left out a clip of Always Sunny In Philadelphia's take of the pitfalls of implication, I'd be remiss. (NSFW) https://www.youtube.com/watch?v=-yUafzOXHPE

Imagine a totally different scenario, where the government is about to cancel a defense acquisition program (like the F-22, which was cancelled). Could Lockheed-Martin bring this to the attention of the employees? If so, how?

I think the meat of the issue is that Uber doesn't get to decide Prop-22, it's a decision by California and if you want to sway CA talk to CA. If you legitimately think your business and all it gives to the economy and community would be destroyed by that proposition then tell that to all the residents of the state - targeted messaging to your employees is just all sorts of shady and, whether intended or not, it will leverage the power imbalance of the employer/employee relationship for some people.

It's pretty much the same reason you should look elsewhere for love - there is an existing relationship between an employer and employee - bringing other relationships into the scenario just makes things murky.

Large employers, with a lot of market power would still be able to communicate to their employees via public channels. Small employers with very little (employment) market power would be basically muted.

Is this what you're looking for?

If Uber just presented an explanation of the issues and allowed drivers to decide for themselves without any way for the platform to track their decision, no problem.

To seriously answer the question: I don't know where or how you'd draw the line in the sand.

A few scattered, merely-the-facts statements that a business will shut down as a result of a new law is very different than a continuous campaign of political messages and surveys through the official work app. There's a lot more room to argue that Uber's communications amounted to an attempt to coerce or influence, though it will still probably be an uphill battle.

(I am not a lawyer)

In which case, I think we're back to this being more on the, if-not-reliatory, at least coercive side; the club owner is trying to coerce them to help him stay open as a strip club, but he could just as well be a different kind of club and stay open.

You'd very literally be imposing a gag order on certain parties with regards to political speech. Laws of that nature were very clearly struck down by SCOTUS in Citizens United.

It's like saying that oil company management cannot state that they will close or layoff most of staff, if gasoline vehicles are banned by law.

They 'threatened' to shut down the same way a shopkeeper 'threatens' to shut down when the mafia boss wants 100% of the profits. It's not punitive shutting down, it's existential shutting down.

Uber as it exists right now (with the service level, coverage etc.) cannot exist if AB5 has its way.

(Could the downvoters please reply explaining what I said wrong? I think the numbers make it clear that Uber doesn't have the margins to do what AB5 expects it to do while not changing prices drastically)

It also looks like the sort of political speech the First Amendment was designed to protect.

Uber threatening to fire employees who don’t support a measure is a labour issue. Uber opining on what it might do if a law were passed, without specifically regulating its employees’ or contractors’ views, voting or activism on the matter, is policy discussion.