1) Drivers providing their own cars is not a strong factor - pizza delivery employees also drive their own cars.

2) Uber "control the tools that drivers use" by regulating the newness of the car.

3) Uber exercises extensive control over vetting and hiring drivers and requires extensive personal information from drivers.

4) Uber alone sets prices, and tipping is discouraged, so there is no mechanism for driver (as "contractor") to set prices.

5) Plaintiff driver only provided her time and car. "Plaintiff's work did not entail any 'managerial' skills that could affect profit or loss."

6) Drivers cannot subcontract (presumably negating Uber's position as a "lead generation" tool for contractors).

Sorry that these are out of order. Look on Page 9 of court documents for full text.

1) Chicken farmers own and provide equipment that (2) the parent company requires and has set standards.

3) The contractee chooses farmers based on some criteria(not certain, but I would assume it's fairly extensive).

4) Contractee sets prices; the farmers do compete with each other for the best pay based on quality, but the farmers do not set prices. Chicken quality could be seen as equivalent to Uber's pay based on hours/distance driven.

5)Chicken farmers do possess skills that influence Tyson's profit or loss, so this point differs.

6)I'm very much doubt that the farmers can subcontract.

7) The chicken farmers are vital to the contractee's business; the profit of Tyson and other companies that use poultry contracts depends primarily on the supply and quality of the chickens raised by the contracted farmers.

Overall, Uber drivers and contracted chicken farmers seem fairly similar though the chicken farmers may conform slightly more to the traditional contractor role.

e.g. I could be paid by a farmer to to work on such a chicken farm (presumably many people are), but I can't be paid by an Uber employee to cover their shift. That is a critical difference.

This seems an extension of the existing South African minibus taxi industry model, where drivers make a daily quota for taxi owners, then keep the rest. (It has also led to at least one early-afternoon Uber ride with a very sleepy driver who was up from before dawn making his quota for his owner).

In any case, in South Africa, at least, Uber is clearly acting as a facilitator, rather than a direct employer.

I think it would be a pity if rulings like the one in OP lead to the worldwide emergence of capital-rich fleet owners taking on the role of employers, because Uber became hesitant to deal with individual driver/owners for fear of being designated as their employer.

It's a little rare to actually see the same person driving as is in the official picture in the cab. But then again, the cab is used 24/7 for maximum efficiency...

This is Tyson's overview of their contracts: http://www.growwithtyson.com/overview-of-contract-poultry-fa...

http://perdue.balancetrak.com/lists/103/jobdescription.aspx?...

(Edit--I did find some vage(pretty much state regulations) at Tyson, but if anything they don't regulate their independent farmers enough?)

>Uber alone sets prices

is the killer one. I guess the only solution to that would be to make it more of a market where drivers could choose their rate to compete.

This is how every other independent contractor works.

Riders set the rates with demand based pricing and drivers choose which one gives them the best opportunity at each trip request. That's a unique situation, so a comparison to "every other independent contractor" misses the point here.

Also, Uber actively discourages this by penalizing drivers who skip to many fares, which suggests they really don't want you to do this.

When Uber caught on, they added the penalty.

But in this case, when a driver takes a Lyft passenger instead of an Uber passenger, they are actively taking business from Uber. This is more like an employee working at a call center, and answering calls for another call center on their cell phone instead of taking the ones that are ringing at their desk.

Ebay for instance, the suppliers set the prices. Amazon Marketplace: the seller sets the prices (not Amazon).

Uber sets the prices, NOT the free market.

Uber is a price setting monopoly, the "sole authority" of the price within the Uber "marketplace". Consumers do NOT have any ability to change the price. Nor do any of the Uber drivers.

Taxis never were a free market either. But at least they didn't pretend to be one like Uber does.

> Uber is a price setting monopoly, the "sole authority" of the price within the Uber "marketplace".

Within the Uber marketplace dilutes the definition of "monopoly" into meaninglessness. Uber competes for drivers with Lyft, SideCar, taxi companies, limo companies, and, well, every other company hiring (relatively) unskilled labor. Uber competes for passengers with, uh, again, Lyft, SideCar, and taxi companies.

A free market does not require that consumers have the freedom to choose exactly what price they will pay for a particular product or service. What defines the free market is the ability to choose between competing products and services.

Can the Uber drivers, within the Uber marketplace, compete with each other? If yes, then they are acting like independent agents. If not, they are acting like employees.

So, is Uber acting like a market, or like an employer?

Uber has one job. Connect riders with drivers.

The "libertarian" solution is to provide a marketplace where drivers can sell their services to riders. Drivers can compete against each other by raising or lowering prices, while riders can compete against each other by similarly increasing or decreasing the bid.

Uber pretends to do this, but with a distinct difference. Uber sets all the prices. Therefore, Uber is anything BUT a free market.

Maybe you don't get it because you haven't been paying attention to Uber marketing. But I'm not claiming that Uber has no competitors. What I'm saying is within Uber's "marketplace" of "independent contractors", the drivers and riders are in fact helpless to Uber's pricing whims.

Uber is NOT a free market. But they are trying to market themselves as one. This is a distinct reason why Uber drivers have been declared to be employees.

> The "libertarian" solution is to provide a marketplace where drivers can sell their services to riders.

States create solutions. The libertarian "solution" is to do nothing and let the interactions happen organically. This could mean a marketplace, it could mean other things. It really depends on what people want, the locality, technology available, etc. And sometimes people actually want a monopoly and are happy with that. Facebook is practically a monopoly and I don't think people want 2 main social networks.

> Uber pretends to do this, but with a distinct difference. Uber sets all the prices. Therefore, Uber is anything BUT a free market.

I agree that Uber by itself is definitely not a free market place. I'll take your word that their marketing paints a different picture--seems likely.

Upvoted.

You are confusing anti-trust law ( or something else ) with labor law.

A misnomer. Uber sets the prices, not the market. Uber can market the concept as much as it wants, but it doesn't change the fact that Uber sets the prices and therefore, no free market really exists.

Riders don't set the rates, no... but I'm not sure what that has to do with a free market.

[0] - http://www.forbes.com/sites/andrewbender/2015/04/10/ubers-as...

> Uber is arguably the #1 regulatory power in the U.S. personal transportation sector.

I would reserve the phrase "regulatory power" to government. I think you're using it here for the hyperbolic value.

I am being snarky, but the libertarian poster-child is shielding 46% of the national market from competition (drivers can't compete with eachother) and that's pretty ironic.

> A free market is a market system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.

Uber is a price-setting monopoly within the Uber market. Uber is the sole authority in the prices that consumers pay and that drivers receive.

The Uber marketplace is NOT a free market. QED. Its rent-seeking behavior on behalf of the owners.

Consider a counterexample - eBay is clearly a market. Independent buyers and sellers agree to transactions, on their own terms. eBay competes for the attention of both buyers and sellers, in terms of service and fees, not on the prices of the actual goods in the market.

If the competition that's happening in the transportation market is between Uber and Lyft, and that competition is on the price of rides and quality of rides, then Uber isn't a market, it's a vendor in a market - and thus the drivers aren't vendors within Uber's market, they're just employees of Uber.

As an employer Uber can set shifts for its employees and ban them from taking jobs from anywhere else while on shift.

I wonder what Uber's new privileges with respect to its workers will cost. What benefits are California employers required to pay? Paid vacation? Pay in lieu of notice for termination without cause? Employment insurance contributions? Social security contributions?

It's all going to be a moot point in the end. Transport automation is coming.

Uber's biggest asset is the installed customer base. Uber's drivers are technically their biggest liability... as this ruling well demonstrates!

I'll also speculate this this is a pretty big competitive advantage. Collecting that much ride data is not trivial.

Actually it pretty much is, if you're willing to snoop on handshaking data from peoples' cell phones.

When I want to get from point A to point B, it doesn't really matter what my friends or other people are using, I just personally want good service at a good price - and I don't think I'd be particularly loyal to any one provider.

I expect that smaller regional providers of self-driving taxis would be able to compete on even footing with larger companies, once self-driving vehicles are purchasable commodities without heavy R&D costs.

If Uber can operate 100,000 robo-cars in San Fran you can walk up to the sidewalk and press Hail and presto you have your ride. They can dynamically balance load between nearby cities on a day-by-day even hourly basis dispatching streams of robo-cars from their garages when the surges hit. Large events which drive demand are pre-scheduled and automatically reflected in both car distribution and the number of gasoline futures they trade on the options board for the upcoming week, etc. etc.

You can bet these robo-cars will be getting robo-tire-rotations and any other effeciencies they can squeeze out. (Imagine a line of them going through Uber's robo-washers)

5? 10? 15 years out? Doesn't really matter but I'm convinced it will eventually happen. It will be awesome and terrible all at once.

Incidentally, this is why car manufacturers like Daimler and VW are running carsharing systems

Companies like Uber face problems most of us can't even imagine, such as regulatory capture by the incumbent taxi industry. Yes, Uber plays dirty, but to some extent I think they have to, because it's a dirty game.

No, it really isn't. There isn't anything special about them, unless you're one of those people that believes a patent should be granted for an existing process simply because now it says, "on a computer".

In the model where contractors are dispatched to handle some task by phone the contractor is able to make counter offers to the company. Eliminating that through automation affects the legal test. The point I was replying to about the ability to choose jobs from different clients (Uber vs Lyft vs all the other edelivery services) also makes this different.

This is a complex area of law, which I'm guessing you haven't personally litigated, so you incorrectly compare it to the software patent issue.

I knew someone who worked at a grocery store that was 24/7. Except they did close on Christmas, New Years, and Thanksgiving. The store's insurance was for a 24/7 operation - which meant that someone had to be in the store even those 3 times a year it was closed. So my friend's job 3 times a year was just to sit in an empty store by himself. Just to comply with the insurance policy.

I knew someone who was a master control operator for a TV station for the overnight shift. He told me his job was "make sure the TV doesn't go off the air" which ended up being that he was on the internet and watching TV his whole shift since the TV broadcast very rarely malfunctions. (I don't know if this is usual or not for a master control operator)

No, it isn't. There isn't anything special or unique about Uber that says they should be exempt from existing law.

"Riders set the rates with demand based pricing"

No, they really don't. I have no ability as a user to state how much I'm willing to pay for a trip.

How is that different than Uber?

http://www.edd.ca.gov/pdf_pub_ctr/de231tc.pdf

In Santa Cruz Transportation, Inc. v. Unemployment Insurance Appeals Board (1991) 235 CA 3d 1363; 1 Cal Rptr 2d 641, the Appeals Court held the drivers who paid the taxicab company a fixed-fee to lease a taxicab were common law employees of the company

This may simply not have been tested in court (or not in any newsworthy case). If you keep a small number of independent contractors happy enough, they won't split hairs over this issue.

As I said to you previously (https://news.ycombinator.com/item?id=9592532 ): What value do you expect to get out of demanding that people analyze these random situations? Ultimately, it's the government bureaucrats and legal system that make the decisions, so even if someone gives you some relatively definitive answer, it could still turn out to be wrong.

The determination is made by applying a series of subjective standards, looking at situations that are somewhat comparable along one of those standards is not necessarily going to inform the outcome if the other standards are subjectively more important.

There is room to articulate some frustration with the seeming arbitrariness of the law, but do that instead of asking argumentative questions that are only vaguely interesting to the topic.

But then the driver loses the ability to see when the price goes back up.

If you are "ON" the Uber app, you are required to accept the Uber price, or you get penalized. At no point can you say, "I am willing to accept this price which is lower than Uber." nor can you say "I am not willing to accept a fare below this price for this distance."

In Reno, you hardly ever see a taxi driving, so they can all be called for a pickup. I honestly don't know if one would stop if you hailed it.

Aside from real limos, I can't remember seeing luxurious taxis outside of New York. But if they exist, it would be because the local laws allow them to charge a different rate than regular taxis.

[1] http://www.visitsweden.com/sweden/Travel-guide/Getting-aroun...

It's not as it uber is the only employer - most drivers I've seen use lyft as well and choose between them at will.

As a rider, I cannot tell Uber I want to pay $20 to get me to the airport, I can accept their prices or not use the service. Uber is setting the prices for their drivers.

How about Sidecar's approach of actually letting drivers price their services (to some degree)?

(I am so glad the government stepped in on this one.)

http://www.edd.ca.gov/pdf_pub_ctr/de231tc.pdf [PDF]

Cites precedent in Santa Cruz Transportation v. Unemployment Insurance Appeals Board. Here's what's relevant to Uber:

1) Drivers could be terminated if they did not maintain good relations with the public.

2) The company required the drivers to account for the fares they received.

3) The work did not require the expertise of a skilled professional.

4) The drivers depended on the company’s dispatcher for their livelihood.

5) The drivers did not set their own rates, but were paid according to the number and distance of fares they carried.

6) There was no evidence of entrepreneurial risk.

7) The customers called the company and the company arranged for the performance of the services.

8) The drivers did not advertise their services.

9) The driver’s work was part of the regular business of the taxicab company.

1. We're not allowed to receive tips. 2. They take 20% of our commission anyways. 3. Who gets tipped here? Uber does, not me. 4. I use my own car, quite frequently, and unlike a pizza delivery guy, the valuable that I'm transporting is another person's life. 5. If I get into an accident, my insurance screws me. 6. I don't get paid enough.

Well, unless you purchased specific insurance to cover the cost of driving your car for business use of transporting people.

Of course, for this to be done well they need to pay the drivers enough that tipping is not necessary.

Yes, the valuable you're transporting is another person's life, and you're doing it in such a way that circumvent all regulatory safeguards to protect that.

Don't make Uber out to be selfish and greedy when you're doing the same.

And you aren't self-interested or greedy when you find the opportunity?

And why do you work for a company that is so terrible? Find a new occupation or work for a competing service.

Drivers absolutely choose their tools and invest heavily in those tools which directly impact their profitability and their ratings. Drivers absolutely employ managerial skill in deciding what hours and how many hours to work and what areas to drive in to get the best passengers and best ratings.

For example, the last Uber ride I took, the driver explained how they specifically avoid driving during certain time frames and certain locations because the fares are more likely to damage their tools, or leave poor ratings, or start yelling at them randomly.

> Uber exercises extensive control over vetting and hiring drivers...

For a pretty lose definition of 'extensive'. Nothing compared to a typical job interview and vetting process that a real hire goes through. How many dollars per contractor does Uber spend validating drivers? Probably averages to something like $25 - $50. There's a validation process, certainly, but it's hardly a "vetting" process.

> But for Defendant's intellectual property, Plaintiff would not have been able to perform the work

This is also absolutely not true. There are a number of different apps which would allow the plaintiff to perform substantially the same work using the same tools and the same business plan. But for using the Uber app, they would not be able to pickup Uber fares, obviously, but that's a tautology. They certainly would be able to perform the same work though. Or they could write their own app and perform the same work (obviously fighting the network effect, they may not succeed, but it's certainly possible).

The fact is that plaintiff can drop Uber on Monday and be driving for Lyft on Tuesday, or even drive for both concurrently and arbitrage between the two apps.

Personally I think this ruling goes too far, but it is a close call and it will be very interesting to watch this develop. The chicken farmer analogy is a good one. If Uber drivers are employees, it actually breaks a fairly large number of well established business models. I think this has more to do with push-back against Uber specifically than technical compliance with the law.

I keep seeing this, why do you believe that because people are using more than one app it makes it impossible for them to be employees? Why can't someone work more than one job and be considered an employee of both?

They can't be hourly, because in any given hour they may work for two different companies. They can't be salary, because they are collecting income from both companies concurrently.

So what are they? Minutely employees?

Even if you try to say that they are minutely employees, you have to account for the fact that there is no preset schedule, or even an expectation that the Uber driver must take a fare offered them. In other words, there's no "boss"; the computers are just making a series of offers, some of which may be accepted and others rejected.

Again, not an expert; just using my intuition.

Since each effective work 'shift' begins with picking up a rider and ends once they're dropped off, outside of the taxi industry the best comparison i can make off the top of my head is the workers of one of those 900s numbers. They can work from home and accept calls as they please, with each payment being independent of the next. I'm not sure if they're contractors or not, never really looked into it, but they would be 'minutely employees', so to say. You don't even really need a 'boss' in that situation either, just a computer switching calls.

I think the "ruling" is pretty silly. The Uber model is reasonable. Maybe some tweaks are needed but from a high level it's a legitimate approach.

Coder is a better question. I think the argument is that they have a lot more freedom in what they do... i.e. pick their own libraries etc.

Fast food workers, retail workers and such? They're hourly employees, but employees nonetheless.

1.) Agents are mandated to use their company logo and brokerage info in all ads, both by NYC law and by the company. Some companies have strict dress code requirements when meeting clients.

2.) The brokerage firm definitely controls the tools used, from internal databases to marketing syndication tools to in-house CRM systems.

3.) The brokerage firm has vicarious liability over the actions of their agents (also mandated by NYC law). For that reason the brokerage firm has a huge incentive to vet their employees.

4.) Agents generally have very little discretion if any on the commission charged. The brokerage firm sets commission policies and any deviations must be approved by the managing broker or associate broker.

5.) I highly disagree with the court ruling here [edit: administrative ruling?]; my understanding is Uber drivers are free to turn off the Uber app and operate without the source of leads generated, and that certainly impacts PNL (if that's not the case, agents still can't simply ignore leads forever without getting fired). Uber doesn't mandate when or where the work is done. Same with agents, the brokerages generally can't impact when or where the work is done, with the exception of some mandatory company wide meetings. Firms tend to provide desk space and equipment.

6.) An agent hired by a brokerage firm may not "subcontract" by having a friend show up in his place and conduct the work, even if the friend is a licensed real estate agent -- the brokerage, assuming vicarious liability for the actions of all their agents, would not allow it. This is different from an overworked agent asking a colleague to take over clients, both are still agents of the brokerage.

Additionally, New York law is not California law, and 1099 vs W-2 distinction is a federal tax law distinction, which is distinct from California, New York, or even federal labor law employee/contractor distinctions (though some of the factors that are relevant may be similar between those different sources of law.)

> I highly disagree with the court ruling here

There is no court ruling, its an administrative ruling that is being appealed to a court.

1. This is an appeal from a decision by a hearing officer of the California Labor Commissioner. Most of the time such officers spend their days hearing things such as minimum wage claims. Hearings do not follow the strict rules of evidence and are literally recorded on the modern equivalent of what used to be a tape casette instead of by a court reporter. Such hearings might run a few hours or, in a more complex case, possibly a full day as the normative max. The quality of the hearing officers themselves is highly variable: some are very good, others are much, much less than good in terms of legal and analytical strengths. In a worst case, you get nothing more than a pro-employee hack. The very purpose of the forum is to help protect the rights of employees and the bias is heavily tilted in that direction. That does not mean it is not an honest forum. It is. But anything that comes from the Labor Commissioner's office has to be taken with a large grain of salt when considering its potential value as precedent. Hearing officers tend to see themselves as those who have a duty to be diligent in protecting rights of employees. Whether what they decide will ever hold up in court is another question altogether.

2. Normally the rules are tilted against employers procedurally as well. When an employer appeals a Labor Commissioner ruling and loses, the employer gets stuck paying the attorneys' fees of the prevailing claimant on the appeal. This discourages many employers from going to superior court with an appeal because the risk of paying attorneys' fees often is too much when all that is at stake is some minimum wage claim. With a company like Uber, though, the attorney fee risk is trivial and all that counts is the precedential value of any final decision. It will therefore be motivated to push it to the limit.

3. And that is where the forum matters a lot. The binding effect of the current Labor Commissioner ruling in the court is nil. The same is true of any evidentiary findings. The case is simply heard de novo - that is, as if the prior proceedings did not even occur. Of course, a court may consider what the hearing officer concluded in a factual sense and how the officer reasoned in a legal sense. But the court can equally disregard all this. This means that the value of the current ruling will only be as good as its innate strength or weakness. If the reasoning and factual findings are compelling, this may well influence a court. Otherwise, it will have no effect whatever or at most a negligible one.

4. What all this means is that this ruling has basically symbolic importance only, representing what state regulators might want as an idealized outcome. Its potential to shape or influence what might ultimately happen in court is, in my view, basically negligible.

5. This doesn't mean that Uber doesn't have a huge battle on its hands, both here and elsewhere. It just means that this ruling sheds little or no light on how it will fare in that battle. You can't predict the outcome of a criminal trial by asking the prosecutor what he thinks. In the same way, you can't predict the outcome here by asking what the Labor Commissioner thinks. In effect, you are getting one side of the case only.

6. The contractor/employee distinction is highly nebulous but turns in the end on whether the purported contractor is actually bearing true entrepreneurial risk in being, supposedly, "in business." There are a number of factors here that do seem to support the idea of true entrepreneurial risk but that just means there are two sides to the argument, not that Uber has the better case.

7. In the end, this will be decided in superior court and then, likely, on appeal to the California courts of appeal beyond that. It will take years to determine. In the meantime, the Uber juggernaut will continue to roll on. So the real question will be: should we as a society welcome disruptive changes that upset our old models or should we use the old regulations to stymie them? Courts are not immune from such considerations and, as I see it, they will apply the legal standards in a way that takes the public policy strongly into account. It will be fascinating to see which way it goes.

That seems like a loaded way of phrasing the question.

Here's another loaded way to ask the question: should we as a society welcome disruptive changes that allow companies to turn defacto employees into at-risk "entrepeneurs", or should we rely on over a century of established practices for protecting employees from being unfairly exploited?

Well that's a hilariously unbiased way of framing it.

I very much enjoyed reading this (longish) piece by Nick Hanauer and David Rolf, "Shared security, shared growth":

http://www.democracyjournal.org/37/shared-security-shared-gr...

Uber's key innovation and disruptive influence is in the customer experience, and I look forward to them finding a way for them to focus on that without exploting technicalities in worker characterization.

Uber started a revolution; but there is no requirement that they survive it.

What do you make of the Berwick Enterprises wrinkle?

Civil disobedience should be the last thing you try, after all the usual channels fail, not something you just leap into because you don't feel like trying the proper channels first.

If the AT&T monopoly had been preserved to the present day, and/or the Carterfone decision had gone the other way, I think we would be seeing a lot of civil disobedience in the form of people connecting unauthorized devices to the network.

I'm sure we'd see civil disobedience of the form you mention if telecoms deregulation hadn't happened. But my point is that it did happen without the need for civil disobedience. Civil disobedience is reasonable and good when you've exhausted all the normal avenues for change and it's not working. But Uber hasn't even tried to get taxi regulations reformed or removed. They've started out by simply ignoring them without ever trying to work within the system.

Of course we've definitely crossed over into matters of opinion now.

All I'm saying here is that if there are problematic regulations you should try to actually get them reformed or removed before you take the step of just outright violating them, because it can and does work sometimes to make that attempt. I'm surprised this is such a controversial opinion.

Edit: it appears that the critical factor they considered was whether or not the driver could have operated their business independently of Uber. They said they could not. They also cited the fact that Uber controls the way payments are collected and other aspects of operations as critical to showing employment. http://www.scribd.com/doc/268946016/Uber-v-Berwick

"Plaintiff's car and her labor were her only assets. Plaintiff's work did not entail any 'managerial' skills that could affect profit or loss. Aside from her car, Plaintiff had no investment in the business. Defendants provided the iPhone application, which was essential to the work. But for Defendant's intellectual property, Plaintiff would not have been able to perform the work."

That's a pretty solid line of reasoning, to be honest. Note that for those unfamiliar with the subtleties of legal jargon, the words "but for" have a specific meaning that relates to causality. In other words that last sentence roughly translates to "if not for the existence of the iPhone app there would be no distinct or independent business here."

In addition, earlier in the ruling they address the fact that mere ownership of a car has historically not been considered the same thing as owning specific "tools" required to perform a job, and it cites the fact that previous precedent for delivery drivers that they are employees, and merely owning the car and paying for gas does not change that.

This is a factor in total revenue but not a factor in marginal profits.

I argue that because I don't get a choice of waiter, their actions have relative little consequence apart from the current transaction - I am not much more likely to come back because I may not get that same waiter - and customers have very limited information. Not so with Uber.

I can't.

http://www.law.cornell.edu/wex/but-for_test

http://dictionary.law.com/Default.aspx?selected=113

http://legal-dictionary.thefreedictionary.com/%22But+for%22+...

Not true. I know someone who drives for Uber. Just last month, he was suspended because he did not want to drive during low-demand hours (when he literally loses money). Uber drivers are, in fact, required to (a) work when they don't want to and (b) work specific hours.

Incidentally, if it were a 2-party scenario where you required a specific contractor to be available on demand, you would probably be their legal employer. A mandated, regular schedule is indeed one the main tests when distinguishing between an employee and a contractor. I have worked as a software contractor in the US for over almost 15 years and the employers, especially the larger ones with proper HR departments, have been careful to define my work in terms of skills and deliverables, not hours worked.

If I don't weed out people to make the connections as efficient as possible, I'm not doing very well at my job of handling the logistics.

They make some references to Case law for a Yellow taxi case back in 1991. (at least that was my reading!)

But I think the Cali court may have had the right of it by going "that's bullshit."

As one can quickly see that line of argument is exceedingly thin. In order for it to make even a little sense it would have to be rephrased to something more like an argument that Uber's business isn't providing rides, but connecting people who need a ride to an independent business that offers rides to people.

But taking a step back, though it does seem to be a vaguely mitigating factor, maybe, in the abstract, the fact is that this woman wasn't a contractor by the legal definition.

The law doesn't say that employee/employer relationships are determined by what could have happened in some alternate universe. There are full time employee plumbers and carpenters and programmers, and contractor plumbers and carpenters and programmers. They use multi-part tests and precedent to determine which is which.

The determination was that this woman was -- in fact - an employee, it was not a hearing to determine a hypothetical scenario.

Somewhere in California there may be an Uber driver with a fact pattern that makes them a contractor, or not, but it'll take more cases to figure that out.

Of course this is assuming a similar situation with an organization that aggregates customers and connects them to contractors doing the work. The specific example that I saw elsewhere in the thread was the contracted chicken farmers[0]

[0]:https://news.ycombinator.com/item?id=9733269

Yes. infact that happens quite a lot (subject to jurisdiction).

Many builders I know are very concerned about hiring the same contractor too often as they might accidently become an employee (and hence have to pay taxes on them).

These things have nothing to do with my status as an employee or contractor as you'd never guess which one I was based on these facts.

In software, the tools are a big determination, i.e., do you provide your own laptop? You might be a contractor. Are you given benefits such as reasonable vacation days? You might be an employee.

Mis-categorization of employees is a big issue for the IRS and few "contractors" are informed or in a position to threaten to challenge it.

In the software business, I've had an employer who gave me an employment contract and then just decided to write me checks like a contractor each month until I raised a fuss.

I don't know for McDonald's, but for many fast food companies that's absolutely true: the main company (the brand) only sells the franchises, and the franchisers actually own and operate the restaurants. However, the main company holds very tight control over the experience (prices, branding, inspections, menus, ...).

So, if Lyft and Uber and a hypothetical third all had similar business models, and a driver could find people to drive on more than one platform they would be considered independent contractors. I assume Uber wouldn't allow an Uber driver to also be a Lyft driver (citation needed).

This makes sense, and is similar to determining if ANY contractor is an employee. One determinator is if the "contractor" has multiple "clients". If a contractor only ever has one client, and is with that client for an extended time they are more likely to be found to be a full time employee instead.

Others factors generally include things like how you get paid (do you bill the client, or are you on payroll?) or the nature of your work (projects and deliverables, or day-to-day operations, etc).

Of course many of these things favour classifying Uber drivers as contractors, but there's enough of a gray zone for a court to rule they are full-time employees.

I think providing a service to connect buyers and sellers should be able to be distinct from having employees.

It is, but the court decided that Uber exercised too much control over the conditions of the work to just be connecting buyers and sellers.

The former is saying a business cannot exist without employees performing critical functions (I'm not saying that this is de facto truth, but just phrasing the argument).

The latter is saying that without a business, you don't have employees/contractors, which makes sense, but seems obvious and inconsequential.

A ride-sharer / driver needs the platform and the platform needs the driver, fundamentally. It's not like most contracting where it's not the end of the world if all the contracts end.

Additionally, McDonald's (or similar) locations are independently managed to a certain extent, that's why ads always say "at participating locations".

[0] http://www.entrepreneur.com/article/240709

The ruling points out that this isn't as important as it appears. The example given in the ruling is that of a pizza delivery person. A delivery person is considered an employee of a pizzeria even if they are required to provide their own car and pay for their own gas and insurance.

Also, Uber provides drivers with an iPhone (though they don't have to use it).

I think there's a very good argument for Uber having to treat the drivers as employees. They are dependent on Uber and Uber sets the amount they will earn. They would more likely be contractors if the drivers set their own rates and Uber would choose who they wanted to drive. Doesn't Uber also try to restrict who they can drive for too? Additionally, Uber's business relies entirely on the labor of the drivers. Uber also supervises the employees in-part by the rating system.

In terms of buying their own equipment - this is not an uncommon thing in many trades. Mechanics have to buy their own tools. Many machinists buy their own tools.

Truth is there is a lot of gray area here but I can see interpretation both ways. I do hope the drivers in California take this opportunity to organize as quickly as possible and begin collective bargaining with Uber.

I'd set Uber's value at less than one billion if this happened.

I think that would be a bit of an overreaction.

The ruling is embedded on the page.

The case law they cite: "In addition, even though there is an absence of control over the details, an employer-employee relationship will be found if the [Defendants] retain control over the operation as a whole, the worker's duties are an integral part of the operation, and the nature of the work makes detailed control unnecessary."

Now, what society is really missing out on is an opportunity or reason to transition from employer-based benefits to government or society-based benefits. This ruling will postpone a public discussion on the role of employer-based insurance and benefits.

This is really revolting to me. And outlines what my intuition feels is wrong with most SV 'disruption'. Its just so immature. While I don't agree with your later sentiments, the risk shifting is dead on.

This was my reaction as well. If Uber drivers feel that they don't have access to typical benefits like good healthcare, life insurance, disability insurance/workers comp, etc. then it would seem that one solution is to make these things easily available to people who are not full-time employees. And that would help millions of non-Uber citizens as well.

Another solution is what the court is ruling here, to force Uber to take on the complexity and cost. I can't see how this could actually be better for anyone involved in the long run. Uber will just raise their cut of the fares to cover the costs of benefits so drivers won't actually take home more money. I suppose it'll get a lot harder to fire drivers so maybe some will benefit from that?

In any case, I honestly feel like it would be more reasonable if this driver could sue the state of California for not making benefits easily available to 1099 workers. Hopefully Obamacare will open up the Overton Window[0] and this is the way things are heading in the future

[0] https://en.wikipedia.org/wiki/Overton_window

The ruling here isn't a long-term solution, its an immediate (and retrospective) ruling on rights under current law.

Changing the law to provide a different model is a forward-looking, longer-term approach, and not the job of the court or labor commission. That it might be better if taxes -- almost certainly new taxes, including on capital income -- shifted the model of support from employers supporting their employees for certain basic needs to the tax base as a whole supporting the citizenry at large for those needs, that doesn't create a license for employers not meeting their obligation under existing law until that new model is in place.

Of the many factors preventing that I think this ruling is a pretty minor one.

This ruling will have quite little effect on that conversation. The political situation in this country has already decided that conversation shouldn't happen yet.

Is it? If this were to remain, the large majority of the drivers will not have a position to fill. It will not be viable.

>That is, Uber has realized significant margin gains by pushing all risk of carrying passengers and car maintenance onto its drivers

No one has 'pushed' anything. Drivers are consensually agreeing to drive because the pay they receive values their time.

>Therefore, this risk is transferred to either drivers (who are on average mot equipped to handle this risk)

How are they not equipped?

>Now, what society is really missing out on is an opportunity or reason to transition from employer-based benefits to government or society-based benefits. This ruling will postpone a public discussion on the role of employer-based insurance and benefits.

What society needs is less people forcing them to do what others think is best.

It's simple supply and demand. The demand for easy-to-book, gps-enabled car rides is there. If uber cannot accommodate, someone else will.

>No one has 'pushed' anything. Drivers are consensually agreeing to drive because the pay they receive values their time.

People undervalue their labor in order to get the gigs they need to make money. Laborers consensually agreed to unsafe, 18 hour factory work back in the day, and indentured servants consensually agreed to years-long contracts of, effectively, their life.

If the only reason uber competes is due to price difference gained by eschewing labor laws and benefits, then of course drivers are agreeing to drive with them -- there is no other option for their labor when the competitors that provide benefits have to shrink operations due to demand shifting to illegally-sourced labor. That said, I don't think Uber is used due to their price so much as their technology.

>How are they not equipped?

I doubt many will afford commercial vehicle insurance, health insurance, 401Ks, in addition to substantially increased maintenance costs covered out of their own pocket. It will certainly make driving for uber undesirable. Of course, Uber covering these costs is far cheaper overall, and the price change would likely be negligible.

>What society needs is less people forcing them to do what others think is best.

This is just a stupid talking point.

Taxi drivers already were consider contractors and didn't have benefits, so I'd really like to hear that argument.

The real effect of the supply regulation is to force drivers to pay up to a hundred dollars per day to be allow to work by some medallion-owning companies and investors.

Lease drivers rent the medallions, and usually the taxis, for a day or a week from their owners or a middleman. Depending on the owner and the night of the week, a lease driver pays $72 to $100 to take a car out for a 12-hour shift, or about $450 to $650 for a weekly lease. The driver must also pay for gas, at $15 to $20 a night. Drivers keep whatever fares and tips they collect, but they often start a day's work $100 or more behind.

http://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-di...

Oh, come on. Would you accept the phrasing, "Uber has shifted risk away from themselves and toward its drivers"? Which 99% of English speakers would read as equivalent to "Uber pushed risk to its drivers."

That's just factual, not some hidden communist rhetoric.

I really hate the trend of libertarianism inventing its own political correctness, policing regular speech with well-known meanings ("pushing risk") for hidden accusations of oppression and slavery.

There is no pushing of risks. There are inherent risks to any activity, be it crossing the road or driving for Uber.

With a conventional taxi company, if something bad happens, you deal with the taxi company, get compensation, etc etc

With Uber, they wash their hands of it and say it's all the individual drivers fault. So now the drivers have to deal with any bad stuff, and their insurance companies as well.

This is Uber, pushing the risk onto drivers, so it can make more money.

In many places, if something bad happens with your taxi ride, you're still dealing with just the taxi driver. They are independent contractors in many places.

I'm not sure what the makeup is of employees vs. independent contractors, but they are definitely out there in significant numbers. In NYC, for example, most are independent contractors, and this has resulted in a whole mess of problems ( http://nypost.com/2015/01/22/1-5m-in-taxi-drivers-money-held... )

That's correct, it's probably not viable.

>How are they not equipped?

Most personal car insurance policies don't cover operating your car commercially. In addition, each driver would be required to conform to ADA rules (which apparently not all of them were doing https://arstechnica.com/tech-policy/2015/04/blind-users-with...) and the penalties for noncompliance are higher than most people can afford. And those aren't the only rules they would be responsible for - the risks are just really high!

Why is everyone talking about as if we were in 2013?

I just want to make sure that I understand you fully:

You believe that Uber and its drivers negotiate as equals?

Thanks for your clarification.

Since you apparently believe that they're negotiating as "close" equals, I don't believe that you and I can have a constructive conversation about this, and so I'm going to bow out now.

They are not equals, the drivers probably can't get a better deal anywhere else, and the law should be changed to make sure drivers can get a better deal in the future.

What law and how will it work?

>the drivers probably can't get a better deal anywhere else

You just made my point, if driving for Uber was terrible, people wouldn't do it. They do because it's there best alternative.

Of course they would, because there is no alternative.

Sure it would, why wouldn't it? It's not like Uber is the first taxi company that has employees in the history of USA. Why do you think it would make Uber not viable?

There is nothing innate about Uber preventing any other transportation system from moving its tech offerings into the present day. Before UberX, Uber was significantly more expensive than taxis anyway (at least for me it was).

What distinguished it from Uber is that the connection was made to livery companies who complied with labor law, and they therefore cannot really compete on price and struggle to gain traction.

Restricting supply and increasing the prices will forego the benefits of Uber.

I guess you found the main point. If Uber would operate like a normal company, with employees, proper insurance and risk coverage for everyone, it might not be profitable.

If your friends want a startup that will help them get downtown to pound beers faster, and Uber dies, don't worry - someone else who can _actually do the job_ and abide by the rules will almost certainly be there. And the Uber employees who get canned? They might actually

The amount of doublethink people have here about "bad actors will get pushed out of the market for better ones" while simultaneously defending shitty business practices, or conveniently ignoring that bad actor principle when their oh-so-favorite business gets a slap, is pretty astonishing. But given most people on HN seem to only want to "disrupt" the wallets of other so theirs can get fatter through acquihire buy-out plans for their ephemeral startups, I guess it's not surprising.

What's amazing is that people are voting with their dollars that they approve of the business and you want to stick your nose in there and say "hey guys, I don't approve of this transaction. Get out of the car."

The customer wanting something in no way, shape, or form justifies violating the law. And in this case, the customer is NOT told to absorb costs for services they don't want. They're simply told to pay the true cost of the service. If they don't want to, then they clearly did not value the service that much.

Driver A: "I'll get you there for $10. If I crash, you don't get to sue Uber, just me."

Driver B: "I'll get you there for $15. If I crash, you can go after Uber."

As the customer, do you believe I should have the right to choose between these two options? Or do you believe I should be forced to choose B every time?

In CA, you have to have insurance to drive a car. It would be cheaper for you not to have insurance, but most people don't have the money to make things right when they get into an accident. This is exactly analogous.

Outside of that, I find this attitude incredibly patronizing. "We need to save you from yourself" is what it boils down to. You pay somebody for a ride knowing she's not insured? That's _your_ problem, not mine.

1. You're getting downvotes for reasonable requests after taking an unpopular stance, and I hate HN for that. I expected my little pointless bit of snark to be crushed but instead you seem to be getting the blunt end of public opinion here. That sucks, and you're right to want constructive criticism.

2. I (and you) missed a couple of talking points, actually: 'monopoly on violence', 'fruits of labor', and 'coercion/taxation/etc is slavery'.

Operating in a legal gray area isn't a good solution for drivers, riders, or Uber.

Beyond that there is a really interesting debate as to whether sharing economy jobs are an end-run around minimum wage laws, rendering such laws meaningless for certain industries going forward. If the majority of workers are turned into 1099 consultants, but are doing effectively the same jobs (drivers, delivery people, etc) that employees did in the past, what does that mean for society?

Please excuse my demeanor, but it means that if the "sharing" economy is really the "tech companies sidestepping worker/labor protections with no repercussions", then society is screwed.

Currently the National Taxi Workers’ Alliance does not have any collective bargaining rights as they represent a non-traditional workforce. Taxi cab drivers are not covered under the Fair Labor Standards Act which protects workers’ safety and grants overtime pay.

I did! That doesn't make Uber's actions any better.

> If anything, Uber will (inadvertently) bring more labour protections where there were none.

I look forward to whatever positive change they can bring about until the commoditization of cheap, electric, self-driving mobility is complete.

No, but it's hard to argue that their actions will screw society, if it was already the status quo.

> society is screwed

Please elaborate.

Walmart is guilty of this to a lesser extent, as while they categorize their workers properly, they pay them so little that they have company-provided documentation on how to collect social benefits to supplement their income, which means we're subsidizing Walmart's labor costs directly.

This will be less of a problem as the minimum wage rises across the country, and companies are held accountable for proper worker classification.

How many years until Uber moves to self-driving cars and this entire article is meaningless?

The real minimum wage is $0: when you can't find a job.

I think arguing about the minimum wage is ''fighting the last war'' and not facing the real problems in the future that will force societies to evolve to survive.

A social safety net funded by a tax on automation.

> I think arguing about the minimum wage is ''fighting the last war'' and not facing the real problems in the future that will force societies to evolve to survive.

We agree here. The real problem is, how will we equitably distribute productivity as automation continues to work itself up the stack? Allow the owners of automation and software to soak up the majority of income? Probably not. It'll either be basic income or guillotines.

According to you, Walmart employees cannot support themselves, even though we have a raft of labor protections. Walmart is not subverting any labor laws, as far as I can tell.

As to your point about minimum wage: how does increasing the cost of labor ensure that more people will have work? When you are unemployed, you cannot support yourself.

The bottom line is that when two parties enter into a contract voluntarily, that should be the end of the matter.

That is a very black and white view; real life has a certain nuance that just isn't captured by blanket statements like this.

You'll miss things if you limit yourself to a single level of abstraction: while it makes sense to the two parties to look at it like that, there is also a larger-scale, societal interest that certain sorts of contracts not be allowed. Thus, society makes rules about contracts and employment. For example, we ban slavery, indentured servitude, and child labor because as a society, we've determined that those are exploitive (even if you can get children who would willingly work for you, or people who would sell themselves to you).

These sorts of laws are what make us a society. For an example of a what happens without them, take a look at Somalia.

Increasing the cost of labor ensures labor can support itself. If a job doesn't exist, the social safety net steps in and ensures you can survive. That's how every other first world country works.

As a citizen, you have basic rights. As a corporation, you do not. A citizen is entitled to survival, a corporation is not entitled to cheap labor.

Should people be allowed to sign contracts to enter into slavery? How about two criminals entering a voluntary contract to never betray each other. Would testifying against a criminal partner then be a compensatable contract breach?

Current US law says no. If two parties have unequal leverage (you need a job to survive, the company does not need you) there is an implicit structural coercion. That suggests it's not possible for two parties to actually "voluntarily" enter an agreement, as one is being coerced by bills/kids/health insurance, without an equal balance on the other side of the scale.

Tell me, how many Uber drivers are able to negotiate with Uber on the cut Uber takes?

Agreed.

> but it's questionable whether raising the wage floor minimizes social benefits payout.

Disagree.

http://www.dol.gov/minwage/mythbuster.htm

http://www.npr.org/2012/01/03/144594861/raising-the-minimum-...

"Increases in the minimum wage are essentially a shift from corporate profits to low-wage employees," he says. "And we know that low-wage employees spend more of their money. They're going to spend essentially every penny they get, so that increased demand is going to result in more economic activity and potentially more jobs."

Honestly, the fundamental situation is not new, only the particulars are novel.

And if you are looking for a ride and Uber has 80% chance of having the closest available car then you are probably willing to pay a premium to use their service.

(see http://newsroom.uber.com/2015/06/clcstatement/)

Uber controls every aspect of the business, from the fares charged (and how much profit Uber will take from each) to the route taken to the conditions of the vehicle to preventing subcontracting. It isn't even close or arguable. As the ruling points out, these people aren't independent drivers with their own businesses that just happen to have engaged in a contract with Uber, nor could Uber's business exist without them.

The short version:

http://www.irs.gov/uac/Employee-vs.-Independent-Contractor-%...

You can see multiple people stating the same here about driving for multiple services: http://qr.ae/7y7fv7

I think this is just another ruling by a clueless government that has no clue what is actually happening on the computers involved.

This isn't about computers whatsoever. This is about the requirements and business relationship between Uber and Uber drivers. The relationship does not allow Uber drivers to subcontract, negotiate prices, and had control over profit and loss. Uber drivers are employees.

So by your logic i can't be employed as waiter at a restaurant and also be employed as cashier at a grocery store at the same time. Obviously i can't be scheduled for the same shift at both places, but with Uber, Sidecar, Lyft, etc your shift starts once you accept the rider and ends when you drop them off. You clearly aren't going to pick up an Uber rider while you have a Lyft rider in the car.

So what's the difference between the waiter/cashier scenario and the Uber/Lyft scenario besides shift length?

I don't see the problem here. Customers like Uber. Drivers are choosing to use it. For some reason the government needs to wade in...

Many people have multiple jobs. Uber doing a poor job of making sure that one of their drivers is only working for them at the time doesn't matter.

No, Uber does not "control every aspect of the business". Specifically, it doesn't control when you work, where you work, how you work (obviously not the route taken), the conditions of the vehicle (beyond that it is legal), etc.

You're wrong about the vehicle condition part and "how you work" is questionable (you have limits on how many fares you can refuse, for instance).

Vehicles can be 10 or 15 years old which includes some 90% of all vehicles. That's hardly "controlling condition". And, OK, lights and seat belts have to work.

There actually aren't any hard limits on how many fares you can refuse but refusing fares is like a contractor turning in lousy work.

What I want is confidence that somebody providing a service to me is provided these benefits - if you work 40 hours/week in "on demand" jobs, you should receive commensurate coverage from the safety net, and you should receive at least the mandated minimum wage. If you work 10 hours in a week, you should receive the pro-rated equivalents of those services. This is, of course, complicated - how do you account for people working two services at the same time, or the "uber on the couch" issue, or who pays for vehicles and other capital goods. But pretending that existing labor laws will cover the changing workforce is silly.

We hear all the time about how the nature of work, especially service work is changing. It seems like a logical consequence that the nature of how society classifies, supports, and regulates work should also change. Uber, et al, and their VC comrades have a huge opportunity to shape the future of how people work, and how the social safety net works - to effect real disruption.

Based on their actions, however, it is hard to conclude that Uber, et al are actually interested in this discussion, beyond the marketing rhetoric it enables. As far as I can tell, they view the friction between existing laws and their business model as a profit opportunity and not a leadership opportunity. And so the inefficient behemoth of government regulation will inevitably step in.

It's going to be hard to make that stick when the entire business model of these companies is based on avoiding as much personal, social, and corporate responsibility as possible.

The real question is political - should we consider this kind of entrepreneurial activity a good thing, when its effects are so uniformly negative for most of the population?

And that's an old question - who should benefit the most from the social value created by work, and why?

At the moment the game is rigged to reward those who are motivated primarily by greed and self-importance. I'd suggest that's not just an unintelligent way to do these things, it's also a really expensive way - because the value of the missed opportunities created by lost economic activity and lack of broad spectrum prosperity is almost unimaginably huge.

From what I understand, if you are an Uber driver and you do not accept a call too many times, Uber will simply stop giving you ride requests. This effectively squashes a driver's desire to drive for other networks because if he/she is busy with another network's ride when an Uber request comes in, he cannot accept it. Do that that some unknown number of times, and you don't get more work from Uber.

I'm curious how much this will affect Uber and what it will do to their business model. If I had to speculate, it would be that it becomes unprofitable almost instantly, but they do have a gigantic warchest, so maybe they can fight the ruling or figure out another way to classify their drivers.

Maybe they can advertise fares and jobs ("This person wants to be driven from SFO to Mountain View") and drivers bid on it like an auction. I wonder if that might change the equation? But then it means that drivers will have a lot more friction in the process.

What would be the value of Uber (and related businesses)? Would it stay in business even? How many VC's would lose fortunes over Uber going nearly to 0? Would this be the popping of what some suspect is a private equity bubble as the effects of this ripple throughout?

Regardless, it would be a very different business with a very different valuation.

I don't understand why self driving cars are good for Uber. Uber is successful right now due to he network effect of their drivers. Once self driving cars are a reality you will see numerous offers for this service with all of them racing to the bottom.

Bigger fish like Apple and Google would be able to siege them and starve them out as pricing races to the bottom. Uber is valuable because of their drivers, not despite their drivers. In the age of self driving cars - Uber won't be able to compete.

Because if there's one thing we know about Google it's that they're terrible at slicing and dicing large volumes of data.

I live in Sydney Australia and catch a fair few taxis.

That taxi diver I use has to pay many $100,000.00 to buy a taxi plate just to work (or work for someone who has bought such a plate), but the same Uber driver does not have such an overhead.

Also, that taxi has to pay insurance in case I'm injured while I'm in their cab, another cost the Uber driver does not have to cover with an insurance policy.

So government has to decide, does it want to eliminate those costs and make it a level playing field, making it an effective free for all.

But why politicians will never do that is because the first crash with the resulting insurance claim will bring the industry to it's knees and from that point on all hell will brake loose.

At present the politicians just don't want to make a decision because it is just a little too hard.

The plate/medallion system gets out of hand when non-driver entities (read, taxi companies) can own the medallions and buy large quantities of them and lease them out at a profit, driving up the barrier of entry.

Where I live / walk (Atlanta), it's not uncommon for every taxi that passes me on my walk to honk or to stalk me seeing if I will hail it.

At hotels near me, taxis will often back up the parking circle, street, and taxi spots waiting for a fare.

If only. Taxis in my neck of the woods park everywhere, including general parking, bus stops, and the middle of the road while loitering for fares.

Uber pays for commercial insurance for it's drivers. See http://newsroom.uber.com/2014/02/insurance-for-uberx-with-ri...

Why do you want government and politicians to enter the game?

See, this is what the libertarian types constantly forget: You are not an island. Your choices do not happen in a vacuum.

The phenomenon in nature is for bees to switch hives if theirs is in demise. "Any worker bee that is bringing in food is welcomed." [source: http://www.beemaster.com/forum/index.php?topic=8374.0]

Changing the existing laws is a different issue entirely. There are serious pros and cons on both sides and the right answer is not obvious.

Über will be on the hook for penalties for the misclassification, but there is reason to believe that the drivers knew that they were classified as contractors and no imminent tax bill is due.

Its also not in the IRS's best interest to put Uber out of business. Even assuming the worst it seems likely that there would be some sort of compromise brokered that would allow Uber to stay operational. They've got a pretty big war-chest to work with.

Why? Uber has shown they're a terrible company when it comes to following regulations. If anything, I would assume the IRS would take a more critical eye towards them, allowing Google's self driving vehicle program to get a head start.

Disclaimer: My opinion is "self driving cars are the future, but f* Uber"

Look the IRS is a revenue generating organziation. Saddling Uber with a 100 billion dollar tax bill will get them a bankruptcy proceeding and $0. Finding a way to collect some percentage of what's past owed and then having them pay, at least, payroll taxes moving forward can bring hundreds of millions of dollars into the IRS's coffers.

I'm not a huge fan of Uber's business practices either but killing them does the IRS no good.

OTOH, it will also discourage future violations of the same kind, because people don't generally start businesses to lose the time and resources poured into it just for the joy of denying the IRS taxes. So, even though it may not be optimal on a narrow view, it may be desirable on a longer view. Corporate tax evasion is motivated by profit, and as long as it is more profitable to break the law and make a partial settlement later, businesses will be encouraged to do it. It if it is catastrophically not profitable to do that, the incentives are different.

If most corporations can avoid taxes other than payroll, why would Uber be any different? They're a tech company! Their only expenses are HQ/on the ground labor, server/storage operating expenses, and whatever real estate they have in the US (with most of it in SF).

Uber is a bad investment.

Uber has massive consumer mindshare, and its still growing fast. When they start phasing-in self driving cars you will have a day where your UberPool ride to work was driven by a human, but your UberPool home happened to be an autonomous car.

Uber is building a brand as the go-to transportation service and that won't be displaced just because another company deploys a fleet of autonomous cars with their own app. Even if that company is Google. Sure, it's a competitive threat, and I have no idea if Uber will be a brand people know in 25 years. But in 5-10? I think they are positioning themselves for dominance as the provider of autonomous transportation.

And it just so happens that Google has a large stake invested in Uber.

> Reuters’ original headline was not accurate. The California Labor Commission’s ruling is non-binding and applies to a single driver. Indeed it is contrary to a previous ruling by the same commission, which concluded in 2012 that the driver ‘performed services as an independent contractor, and not as a bona fide employee.’ Five other states have also come to the same conclusion. It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.

4-6 are madly different for airbnb than Uber:

4) Uber alone sets prices, and tipping is discouraged, so there is no mechanism for driver (as "contractor") to set prices. 5) Plaintiff driver only provided her time and car. "Plaintiff's work did not entail any 'managerial' skills that could affect profit or loss." 6) Drivers cannot subcontract (presumably negating Uber's position as a "lead generation" tool for contractors).

AirBnB is facing an entirely different challenge - residential vs commercial zoning, hotel taxes, impact on the normal rent market, etc. I'm seeing laws coming up either seeking to regulate & tax them as hotels, or outright ban them as in santa monica: http://www.npr.org/sections/thetwo-way/2015/05/13/406587575/... Clearly a residential rental market isn't sustainable when you can easily earn at least double with short term rentals.

In essence, AirBnb is just a broker.

With Uber, you don't rent Wissam's driving services for 20 minutes or hire Samantha to pick you up at SFO. You hire Uber and they dispatch a faceless anonymous cog.

That said I'd be interested to know the break down between host involvement/room etc and "entire place" because Airbnb seem to have sold a lot on the host element and there's arguably a major commitment to the guest by a live in host. Also things like superhosts [0] which clearly aren't employees but come a bit closer to blurring the lines.

I think the ebay seller analogy mentioned might be best though - Airbnb hosts set the price freely, approve/reject at will, can make individualised offers, earn trust and Airbnb - like ebay - call out without employing (and supposedly without endorsing) highly trusted hosts.

[0] https://www.airbnb.co.uk/superhost

For Uber to fall into AirBnB status, you'd be able to rate drivers, and drivers could request to pick you up, and you'd choose a driver amongst those available. That's not what happens. Uber would have less control.

There is much more involved here, but the decision is fairly easy reading.

Switching to driverless raises the question of who owns the vehicles they'll be using, and if they're the ones owning the vehicles in their fleet that represents a major shift in capital expenses and ongoing maintenance costs.

I think if cities and states had to choose between Uber with people (more jobs) and Uber with autonomous vehicles (less jobs) they would or should pick the former.

As much as cities and states can regulating employment rules, and taxi rules, they can also regulate rules for use of autonomous vehicles. So, when it comes down to it, they don't have to choose a regulatory regime that makes either of those options viable.

You buy the car and lease it to Uber for 70% of the revenue. Same model as now, minus the "employee" factor.

Well, there you have it.

Is that really better for the drivers? Sounds worse to me.

I ask because many people have been claiming Uber is a bad actor for making drivers contractors, but it's not clear to me that it's a big win for the drivers to be classified as employees. Actually it seems worse in many ways.

Uber's response:

"Reuters’ original headline was not accurate. The California Labor Commission’s ruling is non-binding and applies to a single driver. Indeed it is contrary to a previous ruling by the same commission, which concluded in 2012 that the driver ‘performed services as an independent contractor, and not as a bona fide employee.’ Five other states have also come to the same conclusion. It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.'

    – Uber spokeswoman

The thing that perplexes me is that existing taxi companies, who are licensed and otherwise compliant with the law, don't adopt the best parts of Uber and Lyft?

Why can't I call a black cab in London the way I call a ride from Uber?

If, by that, you mean the ride-hailing app -- the main part that isn't challenged as an evasion of either taxi laws or labor laws -- they are (e.g., the Flywheel app.)

Not as much visibility, because it doesn't have the dedicated capital and media attention flowing into it from being "disruptive".

It isn't terribly surprising that they can offer cheaper service than incumbents by avoiding the costs of the incumbent. The technology problem they solved is very convenient, but I'm not sure that contributes significantly to the lower costs.

Taxi companies could then get rid of their own dispatchers (gotta be a significant savings right there), their own radio network, and the per car radio transmitters. Plus the rating system would help cab companies identify crappy drivers.

Customer would still get the convenience of hailing and paying for a cab via a smart phone. Plus the rating system could be used to ensure that if a customer gave a driver/car a bad rating that customer would never see that driver/car again.

Uber per transaction gross would be smaller... but they could enter many more markets much faster, have a significant legal services savings (i.e. they wouldn't be sued anywhere near as often), and possibly a savings on marketing (no longer need to market to drivers and customers... only need a sales team that targets taxi companies). And insurance savings... Uber wouldn't need to provide car insurance during trips. And HR savings... the hiring and vetting of drivers remains with the taxi companies.

It's more expensive because the cost is not subsidized by VC capital, and the rates are regulated in order to provide wage floors for the drivers (amongst other things). Not everybody values minimum wages, but it's worth knowing why the cost is higher.

Well, the same applies to child-labour sweatshops that make shoes...

ps - are you aware that in American English, your username is a rather offensive racial epithet?

And many taxi companies do have apps similar to Uber. At least in the populous areas of the States.

I don't think this ruling will have much of an impact on anything.

- Uber has to take on a lot more of the associated risks (in practice that means paying a lot more insurance)

- Uber has to pay benefits to their drivers and ensure that their hourly wages meet local minimums

EDIT: Or, Uber has to change the way it operates so that it can continue to treat its drivers as contractors.

In practice, their entire business model is built around externalizing all their costs and shoving them onto their drivers.

If you read some of the driver's reports then it becomes hard to really buy their "big taxi" schtick. That being said, they obviously provided something that people want. Taxi companies will have to adjust to this. (In some places like SF they already are.) In the end, I think that Uber will go the way of Napster and the taxi companies will end up adopting their techniques the way that the big record companies did.

From a legal standpoint, riding the edge rarely works. Look at what happened to Aereo.

While maybe possible, the science and engineering were continuously obfuscated (for no really good reason--since this kind of advance would be very patentable and profitable), and they never actually produced a convincing demonstration that they were doing what they actually claimed.

If they were actually doing this, they were skirting the edge of the law.

In reality, they seemed to be receiving the signals on a single big antenna elsewhere, and then copying from that signal. This is quite clearly illegal in current law, and is what they actually got slapped for.

Currently the National Taxi Workers’ Alliance does not have any collective bargaining rights as they represent a non-traditional workforce. Taxi cab drivers are not covered under the Fair Labor Standards Act which protects workers’ safety and grants overtime pay.

This is explicit in the FLSA, see 29 U.S.C. §213(b)(17), which exempts (from overtime)“any driver employed by an employer engaged in the business of operating taxicabs.”

The requirements that uber enforces on its (now) employees would pretty much have to be wiped to make it more of a contractor relationship than an employee relationship. No more banning 2-door cars or 11 year old cars, no more banning tips, no more auto-filtering out all less than perfect records, drivers would have to negotiate fares not uber, no more background checks. Basically uber does a traditional hiring process without actually hiring, whereas they'd have to move to a traditional contracting relationship. Uber forbids contracting relationships in their ToS, its specifically forbidden to hire a subcontractor. Clauses like that really set off labor boards and the IRS about "fake" contracting.

Specifically, uber would have to let the end user decide not to accept a ride in my new 2-door Yaris or my wife's 2004 Prius rather than denying for me. Also if riders consistently give me 1 star because of my HN posting habits or whatever, they'd have to let the riders decide to not accept me rather than autofiltering out all sub 4.6 or whatever grade-inflated score they use. They couldn't run a background check on me to join the service, MAYBE they could get away with running it and putting the result semi-anonymously online for the rider to make a judgement. They would have to let me set the minimum fare I'd demand, which actually sounds pretty nice for drivers rather than existing "yes/no" take it or leave it, and tips would have to be permitted.

Possibly they could spawn off a "union" or professional organization that only allows members to join that passed a background check and then only allow members to advertise themselves as part of the union. Like my roofing contractor or my unionized electrician.

There's a widely held belief, that is completely wrong, that a contractor is just an employee who is treated like dirt in exchange for more money than an employee gets; essentially a gambling relationship. The actual legal position is considerably more complicated and is not concerned with popular beliefs.

Dress codes are a different manner.

Another point I didn't mention was they were very unhappy that the company and the contractor were in the exact same line of business, this is often an indicator of problems. A company that makes dispatching middleman software for the taxi industry couldn't possibly care less about what an end user of their software wears while at work. On the other hand, a company that's a stealth taxi driver employer is going to get all out of whack about employee dress codes, even if they call the employees "contractors".

"Do it exactly how we say" is classic employer relationship. "Produce this documented contractual end result" is more typical contractor relationship.

I'm not saying that wearing torn jeans and tee shirt to a financial contract job is wise, in practice dressing that way is probably a good way not to get renewed. Dress codes are for employees and if they're happy with the risk reward ratio for turning contractors into employees, well, that substantial and expensive legal risk is their problem. Maybe for "image" and marketing reasons it really is financially worth it for them.

It’s almost as simple as that, since damages were given out almost entirely on those grounds.

I'll leave it to HN to figure out a guess on mileage =)

Some other interesting notes:

Plaintiff was engaged with Uber from July 23 to Sept 18, less than 2 months (p 2)

She worked for 470 hours in that time, so quite a bit (p. 6)

Damages broken down as follows: $0.56/mile reimbursement, for a total of $3,622, tolls for $256, interest of $274, for a total of $4,152 (p10)

Claims for wages, liquidated damages and penalties for violations were all dismissed (p11)

This is too powerful of a concept to dismantle so easily. Being able to pick and choose when you work and still be able to make decent earnings is very useful to society.

What happens if they lose?

Can other jurisdictions use this finding to change the way Uber operates?

Techcrunch have retracted their original headline as this ruling only applied to a single driver, could we get the HN headline updated accordingly to "Uber Driver Deemed Employee By California Labor Commission"?

http://www.irs.gov/pub/irs-pdf/i1040sca.pdf

Shifting the expense burden to employer instead of employee creates wrong incentives, e.g. one can then choose to deliver on a Hummer instead of a Prius, because maintenance/fuel is paid for by someone else.

Seriously though, they give the "ride sharing" economy a bad name.

Furthermore, their earning potential doesn't instantly vanish. They just compete with existing transportation companies on more even terms.

They have a vastly superior product; there's no reason why they won't continue to be widely successful.

No, Google is. Google has poured more money into self-driving car technology than even auto manufacturers and Bosch.

> Furthermore, their earning potential doesn't instantly vanish. They just compete with existing transportation companies on more even terms.

Uber is nothing special. There is no stickiness. They are the Tinder of the mobility space. People will use whomever is the cheapest and meets their standard.

> They have a vastly superior product; there's no reason why they won't continue to be widely successful.

Unless they're forced out of existence through legislation and taxation. It doesn't matter if you're a tech startup if you don't own the roads. Atoms != bits.

I didn't say they were the biggest, but they are one of the big boys. They just opened a huge robotics facility in Pittsburgh and yoinked dozens of staff from CMU Robotics. They are betting big on automated transportation.

> People will use whomever is the cheapest and meets their standard.

Right. I will continue to use Uber/Lyft because it's cheaper/faster than regular cabs. Heck, I'd even pay a slight premium because it's so convenient.

Have you even used regular taxis in a non-metropolis area? It sucks.

Even with employee drivers, Uber will be fine.

If the government oppressed you, you can kick out your congressman. If Uber oppresses you, you stay under the boot of Travis Kalanick. That's why reasonable people advocate for labor laws.

Nobody is saying reasonable laws and regulations are not important. This is your idea. Not that of a moderate Libertarian.

You are just making shit up. Which is great, but it doesn't change the reality that government is screwing you and me left and right.

They are not protecting the little guy through the sanctity of labor law. They are trying to figure out any way possible to destroy Uber. Why? To protect the unions that feed them money and votes. Are you that blind?

Taxi companies buy monopolies through "medallions" and other machinations and you are here actually implying that the government is protecting us through this degree of interference with the market? They don't give a shit about you, me or the little guy. All they care about is furthering their political goals. It's that simple.

Pull the other one. It has a bell attached!

If Uber oppresses you, you take Lyft instead. FTFY.

Actually, we just have to look down the street - there is a huge amount of labor abuse in the nail salon industry. - http://nyti.ms/1KOuiMq the NY Attorney General is starting to crack down.

I'm pretty sure that the GP is a troll anyways.

The issue here is this business of "independent contractors". Why should the government, today, have a say on the nature of my relationship with my employer? Why? It's not like Uber is the only company where people can get work.

I'll tell you why the government would rather everyone be an employee. Taxes. When someone is an employee they become desensitized to taxation. You never see the money. It evaporates before it hits your bank account. And most people have absolutely no clue how of much money they are handing to their overlords every week. Go ahead, ask around. No clue.

However, in sharp contrast to that, an independent contractor is keenly aware of just how much of what they earn is going to government.

I maintain that if people had to go to the bank once a month to pay taxes rather than having them automatically deducted from their checks we'd riots in every city within two months. Employees are desensitized to the theft taxes have become.

In addition to this, independent contractors have far more opportunities for tax reduction through deductions. Politicians want your money and they don't want this at all.

Take it to an extreme, if next month everyone started to receive 100% of their paycheck and they had to send a check to the state and the feds every month people would wake the fuck up and demand lower taxes and a reduction in spending.

> Why should the government, today, have a say on the nature of my relationship with my employer?

Because we, as a society, have decided to give the "little guy" some small amount of power. We have decided this tradeoff benefits society as a whole in a number of ways. We have decided that the most blatant forms of exploitation shouldn't be allowed. The reason "today" is different is because of regulations not in spite of them.

Taxes have nothing to do with it. Your rant about income taxes is just ridiculous on so many levels, plus income taxes are hardly the only kind of taxes that people pay. My town has property taxes (many thousands of dollars) due in one lump sum at the end of the year. Remember, US federal income tax is younger than the US.

It's all about the benefits and protections employees have that contractors don't. The government doesn't give two shits how many independent contractors are out there, the important part is employers not misclassifying people as independent contractors in order to skirt those protections.

Please, do move to a place where government doesn't regulate working conditions. Work there for a couple years and then get back to me.

I have over 35 years in business as an entrepreneur and have made (and lost) more money than most people can dream about making. I know a thing or two about how shit works in the real world. I know how it worked during low and high tax "seasons" and I know what decisions real business people are forced to make due to government meddling.

I am speaking out of real context having started and run companies with my own cash, having succeeded, failed, gone bankrupt and risen-up again and having created tons of jobs in my community. I am not some asshole simply spouting off based on ideology. I live this shit. I am spouting off the reality every business person in this nation faces.

I am here to tell you that if you don't understand why it is that our government has become the enemy of growth and progress in this nation you really need to gain a better understanding of how the world works. Start a cookie baking operation with your own money and see what you learn after five or ten years.

Call me a troll. Down vote my comments. Call me a jerk and an asshole. Do as you wish. None of that is going to change the reality of what is going on around us. Not one bit.

The government isn't hitting Uber over the head to "protect the little guy". That's pure bullshit. They are protecting the unions that are threatened by Uber. They are actively using anything they can to stop Uber because it threatens their own political gain. Can't you see that? These politicians couldn't give a shit about the little guy.

This isn't about having zero regulations either. Healthy controls are important, necessary and reasonable.

This is about government consuming OUR money efficiently, not growing beyond a reasonable size, not spending without accountability, working with us, not against us, not becoming the enemy of growth and progress. Government does not have the right to meddle in every aspect of our lives.

The tax code is some 70,000 pages. I've been in business for 35 years and I can safely say I can't even begin to comprehend all of it. It is humanly impossible. Can you? Please explain why we need 70,000 pages of convoluted rules to pay for the running of our government and services? The only people who benefit from such a monster are the super-rich who can afford to pay hundreds of thousands of dollars per year for accountants to figure out how to pay less taxes. The rest of us get screwed.

You seem to be so brainwashed by this idea that we need government for everything that you just can't see it the other way. There are few possibilities here:

- You are a unionized worker and, of course, will be pro-government all the way because you benefit from politicians pandering to you. In this case you don't realize what damage you are doing to our country in the long term.

- You are unemployed and supported by some government program. I'm sorry that is that case. I hope you find work soon and make that money available to support others that might have hit hard times. This is important. We as a society must help people during hard times.

- You are a college student or just out of college and have been fed a steady dose of left wing liberal ideology that you swallowed hook-line-and-sinker. Not much I can say to you other than, you've been indoctrinated and I hope you will, at some point in your life, see that the emperor has no clothes. From my experience most liberal ideologs suddently see reality when they start a business and start to experience the consequences of some of the ideology they used to support. I have many ex-liberal friends.

- You are a government worker. Enough said.

- You are and have always been an employee. You've never been an entrepreneur at scale. No, publishing an app in the app store does not expose you to the realities of how government meddles with business. There are a lot of little businesses (graphic design, consulting, freelance software dev, etc.) that can escape the nasty experience afforded to manufacturers, food processors and a whole layer of businesses deeply "touched" by government. There's nothing wrong with being an employee or having operated a small business outside some of the nasty stuff government can do to businesses. Nothing wrong at all. That said, if that is your case, you have to be honest enough with yourself to understand that you simply do not have the context necessary to understand the issues and even begin to discuss them. Arguing about something you don't understand would definitely make you a certified troll. It's like me arguing about open heart surgery with a practicing cardilogist because I read a few articles about it.

As one of my favorite sayings goes: A man holding a cat by the tail learns something he can learn in no other way (Mark Twain).

There are other angles here, but in my experience someone who doesn't agree with the idea that government has gotten out of hand simply isn't exposed to the realities some of us see every day. Nothing wrong with that. Congratulations, But don't pretend you know what's going on because you don't.

We are very connected now. How long would a company last today if they exploited their employees? Not long at all. They'd have trouble recruiting for sure. It'd be all over the web.

Social forces are far more powerful than any legislation.

The extreme case being murder.

Is it illegal to kill? Yes.

Do you go to prison for a long, long time? Yes.

Are there laws covering this from all angles? Yes.

Does government enforce them? Yes.

Do people still commit murder? Yup.

And here's the most important question:

Is the main reason for which people DO NOT commit murder the fact that there are laws prohibiting it (or laying out severe consequences IANAL)?

Nope.

I would be very surprised if any murder had been prevented as a result of someone intellectually reaching the conclusion that the consequences would be severe.

Yes, this is an extreme case. It simply illustrates the fact that laws don't prevent behavior. They punish it after the fact.

Do you speed on the highway? Why? The law says you are not allowed to. Why do you do it?

If you come right down to it laws and rules don't really do very well in the protection department. Look at the commandments and rules of behavior of the various religions. If you are a believer there is no higher power and yet they are broken all the time.

Laws don't protect anyone, they punish after the fact. Decent, moral and ethical people protect and enhance society.

Making the assumption that workers are protected by laws alone simply isn't sensible. Yet, nobody is proposing an environment devoid of any regulation. That's silly. The only idea here is that regulation needs to be sensible. That's all.

We all know people who are absolutely miserable at work. They have all the protections afforded to them through labor law and they are still miserable. And they don't leave. They stay. I've seen it multiple times. They are free to do as they wish and do nothing. Is the employer to blame? Of course not. And government can do nothing to make the employee happy.

I probably couldn't list everything that has changed in the last 100 years in the US in this regard. However, it is clear that exploitation is pretty much gone. I'd challenge anyone to name a reputable company that is actively engaged in exploiting it's employees in the US today.

I am sure someone is going to bring up some sleazy sweat shops in the garment district. Even there the employees have the ability to get the heck out and find work elsewhere. They can't, you say? They are undocumented immigrants? Well, that's not a labor law problem, is it then? That's an immigration problem. If people were not able to work without proof of citizenship or legal work status the sweat shops would not be able to enslave poor immigrants.

Yet you don't see those laws being passed, do you? Why? Almost anyone would agree it would be sensible. Why don't politicians pass these laws? Simple. They need the votes of those who want to see their relatives able to enter the US illegally. Here's a case of politicians hiding behind a "cause" for political gain while doing major damage to the very people they are supposed to want to help. They don't care about those poor immigrants that end-up working in sweat shops. They could not care less. They have their votes. Maim and move on.

So, on the one hand we have the government messing with Uber on the technicality of whether someone is a contractor or employee (which they should have zero involvement in) while, on the other hand, we have government utterly ignoring the situation of illegal immigration leading to exploitation due to the lack of job mobility. And, BTW, it is often culturally isolated immigrants who exploit other immigrants. Anyone who has assimilated into our culture, morals, ethics and social conventions would not do that unless they were criminals.

Ironically the lack of job mobility of illegal immigrants actually proves the value of a free market. They, through the failure of our government to address the issue, live within a framework that prevents them from participating in the free market for jobs. They are devoid of the job mobility enjoyed by legal workers (citizens or not). People in the free market can leave bad job situations or not take the job in the first place based on company reputation, yet the unfortunate situation of the illegal immigrants is that our government, through inaction, pretty much sets them up for abuse.

Interesting the twists and turns things can take when you look at them from multiple angles.

This is patently, demonstrably false. Here's one example, but wage theft and illegal practices are far from dead: http://www.nytimes.com/2015/05/10/nyregion/at-nail-salons-in...

"On a morning last May, Jing Ren, a 20-year-old who had recently arrived from China, stood among them for the first time, headed to a job at a salon in a Long Island strip mall. Her hair neat and glasses perpetually askew, she clutched her lunch and a packet of nail tools that manicurists must bring from job to job."

As I said, this is an IMMIGRATION problem, not a labor law problem. The labor laws are already there to cover this. They are simply not being enforced. However, I'd be willing to bet all of these people are illegal immigrants being abused by their own kind. In other words, exactly what I said in my comment.

Exploitation by reputable companies does not exist in this country. Only sweatshops, generally ethnic, are likely to take advantage of and abuse illegal immigrants, which, again, is a failure in immigration law. In other words, here is a picture perfect case of our government actively harming people for not taking measures to ensure that immigration happens in an orderly manner and will full protection for those who join our ranks.

I'm done.

Further, I don't see why I should be upset at this ruling making it harder for rich companies to shift more and more of their expenses on working class employees. If anything, even if we reduced the scope of government, this is still something they should be doing.

Have you ever started and run a non-trivial business? No, publishing an app in the app store doesn't count. Ten, twenty or thirty employees "brick and mortar". Anyone who has done so looks at your statement as what it is: ridiculous.

Did you even bother to fire up a spreadsheet and figure out Uber's cost structure and how it relates to what they charge and what drivers make in relation to their costs. Of course not. That much is obvious.

Your point isn't wrong, but I suspect you weren't speaking up when the taxi companies bought these laws in the first place.

They get compensated via driving. Which is why they drive in the first place.

Why forcibly stop people consensually partaking in an activity? It's amazing how far away bureaucrats can tell others what's best for them.

Democracy; it's a pretty nifty system.

It is absolutely amazing how people of today totally ignore history and historical context. It has been years and years of struggles to enact labors laws to give employees some very small amount of power in the extremely unequal employee/employer relationship. You're acting like the time of The Jungle and the Triangle Shirtwaist Factory fire were the good old days until pesky governments got involved and ruined everything.

The US, comparatively, has labor laws that don't give much power to the employee (see: at-will employment).

There wouldn't be an issue here if there wasn't a dispute between the parties involved in the activity.

And just because it's "consensual" doesn't mean that it's not against the law. Otherwise should McDonalds be able to circumvent health codes and minimum wage because it found people willing to work for that? Of course not.

Definitely not going to happen in the near future.in 5/10 years maybe, but it looks like Uber is racing to make as much money as possible before the legislator cracks down on it. If the the decision of the commission is confirmed, they'll have to change their business model ASAP. They can do it, they have a shitload of money.

If this ruling sticks, many of those drivers will no longer have a position.

If it is appealed and eventually decided by a court whose decisions are binding precedent -- and the first stage appeal from the Labor Commissioner's ruling would be a state trial court, which is not such a court -- then it would have broader effect.

OTOH, its likely a guide to how the Labor Commission would rule on similar cases brought by other Uber drivers, so, in a sense it signals an effect in California, without having a direct effect on any other worker.

ISTR reading about a Florida decision that found the same thing with regard to Uber drivers, and IIRC there are a number of other labor complaints and lawsuits pending on similar grounds.

* People sign up with Uber

* They drive literally whenever they want

* Uber has no standards for their drivers other than "get good ratings" and "pass a background check"

..and they're considered employees? WTF?

http://www.quora.com/Is-it-better-to-be-a-UberX-or-Uber-Blac...

How many Uber Black drivers are employees of black car cab companies? Does that factor into this? My impression was that this was more about UberX than Uber Black

edit: http://www.businessinsider.com/leaked-charts-show-how-ubers-...

"The most useful part of the Uber guide for its drivers will probably be the advice on how to maintain a high score. Here's what Uber recommends:"

Offer passengers bottled water, chewing gum, snacks, mints and phone chargers. Keep your vehicle clean and well-maintained. Dress appropriately. Open the door. Offer to carry bags. Take the best route. Be nice. Pick up the right rider. Don't ask for a five-star rating.

Apparently a Labor Commissioner disagrees with this assessment.

Can you please cite any case law for this proposition?

PS there is a ton of caselaw on what it means for a taxi driver to be an employee or not, and this isn't in there :)

So the Uber hate comes about because the idea is they are cheating. The drivers' POV is not considered; Uber holds Job Giving Magic and they have to be fair with that power. Proving a service that is in demand is not enough- They have to constantly thank us that we permit them to offer us their service. That's the idea.

And a free agreement between two parties really cannot be reached with such a power imbalance. How many Uber drivers are able to negotiate on the cut that Uber takes of the fares?

And no, providing a service that is in demand is not enough. Just because their service is in demand is no reason whatsoever to not comply with the law.

Uber like any company or individual wants to get maximum value for its spend. Uber is offering $X to drivers. The drivers can opt to take $X, or to not. If enough drivers don't take $X, Uber will increase $X until enough drivers accept the pay. What is wrong with any of this? This is how YOU operate in your daily life.

The law is wrong in many ways. Don't get lost in the fallacy of appeal to authority.