I feel bad for the drivers that are being taken advantage of, but AB5 was a terribly written law with good intentions (aren't they all?).
The big companies they were obviously targeting have the resources to get around it, but in the meantime it killed independent journalism in the state, as an example.
I know a few journalists who can no longer work in CA, despite liking the system they had. The publications won't touch them for fear of violating AB5.
There are lots of other folks in CA who like being contractors who are finding it much harder now, because the people hiring them are afraid of running afoul of AB5 but also can't afford to hire them as employees.
They really need to scrap AB5 and rewrite it, now that they've seen how much it missed the mark.
AB5 has had a chilling effect on 1099 work in California.
Regulators created the 1099 / W-2 distinction for a reason. There are probably good reasons to adjust the rules to take into account the so called gig economy, but making 1099 nearly illegal is not a net regulatory improvement when considering all the collateral damage.
One option that seems very reasonable to me would be to introduce a third option: Employee (W-2), Independent Contractor (1099), Dependent Contractor (new gig economy group).
> One option that seems very reasonable to me would be to introduce a third option: ... Dependent Contractor (new gig economy group).
Yeah that's my preferred option too if we must keep the system, but it has a lot of the same problems.
Small orgs don't have the resources to hire lawyers to figure out if they can do 1099 or "new thing", and so it will still have the same chilling effect on 1099 work.
There should be a chilling effect on some types of employment arrangements where avoidance of worker protections and ancillary compensation was occurring.
Sure but don't do it by mandating what kind of contracts people can enter into. Do it by supporting social services so that they don't have to accept bad contracts.
I think we are destined to agree to disagree. Evidence has shown that people will be economically coerced into contracts, or are not educated enough to understand the consequences of the contract (gig drivers not knowing how little they're making) and the social services currently do not exist to protect them, nor are they likely to be spun up.
Sure, journalists get the short end of the stick, as well as gig workers who don't need the income and just want to do it part time. Edge cases are unfortunate.
Creating a robust social safety net and well-paying jobs is substantially more complex (or, in actuality, impossible in this country) than just banning the employee-as-contractor fraud.
This is exactly the attitude that creates large unmaintainable codebases that are layers of hacks upon hacks. There is an alternative and that is to hire people to do the job that are competent in wrangling complexity and refactoring the system in question.
No, that's not the case at all. You need buy in from interested parties, which you don't have in politics, and if you have a large unmaintainable codebase, you probably don't have from the people in charge.
So everyone should suffer until those exist because businesses are permitted to take advantage of them?
I'm spending low six figures annually on political donations to those who support universal healthcare. I still support shims like this until it gets here. Sorry I'm not fixing it fast enough for you.
AB 5 has everyone suffering. Consider this for a moment, Silicon Valley: the Tiger Teams you contract to pull your fat out of the fire when your infrastructure starts melting down, well you can’t hire them under AB 5 if they are California-based. Persons (which includes Corporations) cannot be independently contracted to produce your main line of business. And when your business is Tech and so it theirs...
> So everyone should suffer until those exist because businesses are permitted to take advantage of them?
That's exactly the point. Everyone wasn't suffering and in dire need of rescue by the state of California. Now, we have a law that hasn't helped the people it was supposed to help and has put quite a few legitimate businesses out of work. Good intentions or not, AB 5 is worse than the old status quo.
Why? not everyone needs an overlarge and authoritarian government baby sitting them.
We became great as a nation without having to rely on a nanny-state to "protect" those poor poor people who are "obviously" unable to do it themselves...
True! And in 1875, do you know what happened if you got hurt on the job? They left you for dead because there was no consequence in doing that. Maybe if they were nice they would drag you back to town to see the doctor first.
But then you couldn't work anymore, and so you died or begged for charity.
The nation was built on the fact that if you became unable to work, or were never able to work at all, you were discarded by society.
I don't want to live in a society that discards people because they can't work.
Workers should be able to choose for themselves. There's a non-trivial amount of rideshare drivers who already have full-time commitments (jobs, school, etc) and want extra income.
They are not looking for another job and just want to maximize flexible revenue.
How about the government provides health insurance and other social service benefits (like employment), then it wouldn't be part of the cost those businesses try to get away from paying?
There are also thousands of people every year who do gig jobs and then get significantly hurt financially when they fall through a job benefit crack (health insurance etc) when they lose a job.
Sure, healthcare separated from employment would be a fantastic development. Doesn't change my point that people should be able to make their own choices.
> Small orgs don't have the resources to hire lawyers to figure out if they can do 1099 or "new thing"
Well there you have it. If small orgs don’t generally have the legal capability to correctly classify employees among three whole choices, then many probably also can’t choose well between two. AB5 helped them make the correct choice, and good thing, given what you’ve said here, but maybe even two choices is too many. Maybe there should be no 1099.
Repeated below but this comment seems more pertinent:
Can the California state legislature create a new federal class of worker?
I keep seeing this in threads, but I don't understand the rationale. The United States Federal Government recognizes W-2 and 1099 filings, the State of California cannot invent a new Federal filing status or amend the United States Code, correct?
No but they can create a new state classification and then make the employer do a 1099 for that person federally but treat them differently under state law.
I disagree. The federal distinction is mainly for federal taxes. The state is not just concerned with taxes, it's also concerned with other labor laws, so it may need to distinguish differently.
I mean, you would need both right? You want consistent tax treatment the whole way through and obviously state worker protections would be the main thing. What am I missing?
I don't see why that's helpful. W2 employees would be treated the same as now. 1099 employees would be treated the same from a federal standpoint, but separated into two groups from a state standpoint.
I suspect dependent contractor and hourly worker would effectively merge. Both would get benefits if they work enough hours. The difference would be whether the boss picks the work hours or you do.
The big issues would be when worker starts and ends, self direction in terms of how they do the job (and associated liability), worker's comp, unemployment insurance, and tools / vehicles (I.e. should Uber be required to pay ~50 cents per mile to it's drivers. W-2 says yes, 1099 says no).
If someone works for two companies such as both Lyft and Uber are they still a dependent contractor? If you have more than one source of income that seems to be mutually exclusive with being dependent, no?
What's the criteria for determining whether someone is a dependent contractor?
I'm not against the idea, but it's important to have clear unambiguous criteria.
Probably as the government don't like the little guy or gal actually working as a real self employed contractor - see IR35 in the UK (oh but self employed layers that's fine )
I see Independent Employee as code for hourly worker, and I see hourly worker and dependent contractors being basically the same, other than who chooses what hours one works.
Yes, AB5 is a band-aid, but if that's all that is possible (politically speaking, it's become a third-rail) then you use the remedy you have at hand or are able to fabricate.
CA may be holding out for some increase of the public safety net at the Federal level in 2021 post-election, and might be forced to move on it's own if things don't turn out as desired.
It’s only a remedy if it leads to these positions continuing to exist and also adding health insurance. With no insurance and no income you are strictly less able to access healthcare.
Yes, it makes no sense for an employer to have to worry about people’s problems outside of work matters. Makes everything unnecessarily complex, but it does a good job hiding costs from taxpayers and letting governments blame employers for lack of social safety nets.
Totally agree. I had the insanity of a consultant living in Maryland, working for a company HQ'd in Washington, visiting development centers in California, and with a contract governed in California, needing to create a company so we could be 100% clear of AB5, and rehoming the renewed contract out of Washington, just so we could satisfy a bunch of HR pencil necks. What a pile of short hits.
I don't think you make a sufficient enough case that AB5 should be scraped, merely that some folks (freelance journalists) were happy with the status quo to the detriment of wide swaths of gig workers (Uber, Lyft drivers).
I'll support a third worker category once gig platforms aggressively support the safety nets (universal healthcare, some sort of income protection besides unemployment) those classified workers would need. Until I see Uber and Lyft yelling as loudly for Medicare for All as Bernie Sanders, let them crumble under a torrent of damages at the hands of the court. Go for the cash reserves while they still have them.
Classic progressive viewpoint tbh. What matters is if they're passing the purity tests and yelling loudly enough about the problem. If not, burn it down. Who cares about those bothersome things like... the actual outcomes, whether any of this is working, whether living in the real world might require making some compromises and working with other groups.
well pretty much this, the common view point is the masses are too dumb to make the correct decision and are in need of help/rescue. Sadly this same pattern of though infests the tech community who is so sure of their superior intellect it completely escapes them that other people, usually those in service industries because its obvious no one would willingly choose such, can make good decisions about their own lives.
hence, laws with pretentious sounding names where opponents are shouted down or branded baby killers. seriously, does it ever stop? I have as have others worked more than one job to make ends meet because this is what you do. I decided where to work not the person or company offering the job. If the work conditions were not to my liking I certainly wasn't going to stay there and the same goes for many in similar situations.
"..well pretty much this, the common view point is the masses are too dumb to make the correct decision and are in need of help/rescue." the rallying call of the nanny state
"The left takes its vision seriously — more seriously than it takes the rights of other people. They want to be our shepherds. But that requires us to be sheep." – Thomas Sowell
I'm unwilling to compromise on some policy required to create a quality of life floor for everyone, and no longer willing to be bound by the tyranny of decorum. Zero apologies.
You don't attempt an intelligent and thoughtful debate with a bully. You punch the bully in the face before they punch you. Progressives should've learned to be less polite sooner (the majority of Americans support universal healthcare [1], and those with government provided healthcare are most satisfied [2], the public already supports the policy, its the politicians who stand in the way). Lessons learned from the last half decade of political observations.
Sure, you can go around punching everyone in the face pre-emptively. At some point you realize, everyone else has taken their ball and gone home and stopped engaging with you. You have become a bully yourself, and you still didn't get what you wanted.
I really can't think of a more fitting analogy for what has happened with Bernie bros over the past 6 months.
We should never shy away from opportunities to have our character and fortitude tested. Suffering that can be overcome is crucial for growth as a human.
“The surest way to work up a crusade in favor of some good cause is to promise people they will have a chance of maltreating someone. To be able to destroy with good conscience, to be able to behave badly and call your bad behavior 'righteous indignation' — this is the height of psychological luxury, the most delicious of moral treats.” – Aldous Huxley, Crome Yellow
The existence of AB5 has had a chilling effect on all 1099 work in the state. That should be the argument against scraping it or at least amending it significantly.
> let them crumble under a torrent of damages at the hands of the court
That's the problem though. Uber/Lyft can weather the storm with their cash reserves, many of the other companies can't. So they just bow out of the system entirely because they can't afford the risk nor the lawyers to even figure out if they are at risk.
It wasn’t some, it was a lot of jobs. Also don’t a lot of these benefit issues still apply if you are under 30hrs as an employee? The end result might be you can only work max 30hrs per week at a bunch of gig companies and still don’t get health insurance.
Why let things crumble and not nationalize them. California can easily buy or capture them both and provide a better service. All these gig workers will become public sector employees.
I'm not against nationalizing when necessary (PG&E), but California could probably deploy a similar digital transportation market system without absorbing the toxicity that is Uber.
Don't forget that AB5 was a response to the California Supreme Court. The court made a ruling that would have classified a lot more people as employees, and then the legislature wanted to clarify that for businesses so they wrote AB5.
The California Supreme Court ruling went into affect in January. Without AB5 things would be even more confusing now than it would have otherwise been, and the legislature is already looking at fixes to the law to deal with the other issues that have come up.
This line of reasoning assumes that the legislature couldn't have made up a third class of worker instead of lumping everyone as either an employee or a contractor. The courts cannot write law in the same way the legislature can, and so was much more restricted in what they could order. AB5 is just unimaginative.
Can the California state legislature create a new federal class of worker?
I keep seeing this in threads, but I don't understand the rationale. The United States Federal Government recognizes W-2 and 1099 filings, the State of California cannot invent a new Federal filing status or amend the United States Code, correct?
You know, I haven't heard that argument being raised yet. That's an interesting point.
I think California could have said "pay gig workers with a W-2 but you don't need to give them all the exact same benefits as employees (health insurance, 401k, disability)”. Basically I'm not sure that it matters much, but you are correct in that California cannot amend federal law.
The "correct" solution is that for every 40 hours of human work a company should be required to pay for a health plan and some number of hours of vacation and time off or get fined. And, if they subcontract, they are responsible for the subcontractor paying that or both get fined.
People with professional degrees and a spouse who pays their healthcare. No big deal. Certify it and document it. Life goes on.
Janitorial company that likes to employ cash off the books. Yeah, that's gonna get hammered.
Someone drives 40 hours for Uber one week, and then goes away for two months. How much health care do they get? Do they get cash or a week of benefits?
How much cash?
Same as the W2 employees but prorated?
Technically even full time W2 employees don't have to get health insurance or paid time off. So what if they company doesn't offer insurance or PTO to their employees. Are they off the hook?
Your system sounds good but unfortunately isn't tenable.
Ironically, if we had single payer healthcare that was funded by taxes, the entire thing would be moot. You'd pay into health care based on what you earned, and you'd get out the same as everyone else.
> Someone drives 40 hours for Uber one week, and then goes away for two months. How much health care do they get? Do they get cash or a week of benefits?
One week of health benefits into the common pool.
I would prefer that the driver get it. I am also okay with it being used to pay for the healthcare of the indigent who show up at an emergency room (which is what the driver will present as, eventually).
> Technically even full time W2 employees don't have to get health insurance
Huh? Your employer doesn't have to provide it. But I'm pretty sure that people being required to carry health insurance was one of the provisions of the ACA. I have to file a form with my taxes showing coverage. Has that changed?
> Ironically, if we had single payer healthcare that was funded by taxes, the entire thing would be moot.
This is misdirection.
That doesn't solve the fact that Uber and Lyft drivers are being paid below minimum wage. That ALSO needs to be fixed.
> Huh? Your employer doesn't have to provide it. But I'm pretty sure that people being required to carry health insurance was one of the provisions of the ACA. I have to file a form with my taxes showing coverage. Has that changed?
Congress passed the Tax Cuts and Jobs Act, which eliminated the individual mandate penalty, effective January 1, 2019
That's the problem with 99% of the laws they make. They attempt to write with good intentions, but completely lack the awareness of how such a law would be enforced.
In their eyes, the journalists should have been FT employees.
Uber and Lyft have the capital to fight it and it's not like other states don't exist. CA isn't worth it if they can't make money here. Would really make the new carpool lot they did for LAX a waste of money.
> CA isn't worth it if they can't make money here.
When they write laws like this they know that CA represents 10% of the population and more than 10% of the wealth of the nation. No company would pull out of CA like that and they know it.
There is a different between taking a loss to fund growth and taking a loss because a market segment is fundamentally unprofitable.
Uber uses the tech startup strategy of funding aggressive growth with VC. This means operating at a loss as long as revenue and the customer base grows.
California is a very mature market for uber. There is little to no growth potential left there, and the government is about to increase the operating cost dramatically. It would make good business sense to pull out of that market.
What complicates matters is that Uber is based in San Fransisco. What kind of power does the state of CA have over companies based in CA but that don't operate in CA?
Uber has the same problem as Groupon: scaling into new markets requires a team of people for each market. It doesn’t have great scaling properties simply by virtue of being a tech company.
And CA is a regulatory leader but not usually an outlier in the long run. They might currently be the only state classifying gig workers as employees but I can guarantee other states will soon follow.
Yes, I see those disclosures regularly even though I don't live in California.
Off the top of my head I also have California to thank for leading the way on:
- Puppy mill bans
- Clean, smoke-free air at work and in bars & restaurants
- Tanning booth restrictions for minors
- Single-use plastic bag bans
- Gay conversion therapy bans
California was also the first state to label Roundup as a known carcinogen. Years before the landmark cancer judgment against Monsanto. So it seems Cal/EPA knows what they're talking about and is providing valuable information not just to their constituents but to the rest of the country as well.
> No company would pull out of CA like that and they know it.
No offense, but that could only be written by a Californian.
I can think of automotive performance and firearm products that while legal in CA, the companies refuse to sell there on the extra regulatory or ideological grounds. I’m certain there are more examples.
There are definitely companies that don’t want to deal with California and willingly remove themselves.
Sure, but did they ever sell in California? I specifically said that a company that is already here would have a hard time justifying pulling out. Especially since their HQ is here.
Yes. Barrett (for one example) entirely pulled out of the state including sales to police. They left 10s of millions in sales.
For automotive performance, no one as large but I can tell you hundreds of millions don’t go to California because it isn’t worth the ridiculous rules CARB put in place and how one regulator will approve and the next will deny.
> I feel bad for the drivers that are being taken advantage of
I have no idea why people think this.
You know how people stop driving? They just don't do it. There's no contract to break, there's no boss to tell. They just stop. In fact, they have to go out of their way to drive! It is entirely volunteer work, every single time.
It's the same thing people used to say about Walmart destroying mom-and-pop stores, but Walmart doesn't do anything. If they build a Walmart, nothing happens until people flock to work there, and again nothing happens until people flock to shop there.
I'm sorry, you sound extremely delusional. We don't live in a world where most people have the resources to "vote with their wallet" on these matters. You drive for Uber or shop at Walmart because it's the work you can get or the store you can afford. People do these things because they don't really have a choice and the raw realities of our society and its economic structure dictate the decision most people make. Maybe you are rich enough to not understand this, in which case I encourage you to go ask an Uber driver why they are out there driving around when they have so many other well-paying options and I bet they give you some education.
> why they are out there driving around when they have so many other well-paying options
Actually, if you read my other replies in the thread I make the opposite argument. People not having other options is an argument for ride-sharing companies, not against them. If they can't find work elsewhere, how are these jobs not good enough?
Just to add to this and spell out the obvious: if they have no better alternatives to being an Uber driver, then how does removing the option to be an Uber driver help them? The list of jobs they could do as an alternative is either the same or even smaller now. The conditions at alternative jobs are going to be worse than at Uber. If the conditions were better then people would already be working there instead of being an Uber driver.
Just to spell out the obvious rejoinder: removing the option for Uber to exploit them forces Uber to pay fairly for the labor that it needs, which helps them by creating much better jobs in a line of work they are qualified for. Rinse and repeat for gig economy companies of various sorts.
They are already paying them fairly. People willingly choose to drive for Uber over other things they could do.
If you force Uber to party significantly more then they simply stop doing business. You can have your corrupt taxis back.
It really grinds my gears when people use the terms "pay someone fairly", "stop exploiting them", and "pay them a living wage". These are all terms that on face value seem reasonable - pay someone enough that they can live off of it, but for some reason it's never enough. $34,000 a year puts you in the global top 1% by income. Apparently that's still not enough for many people in the US.
> If they can't find work elsewhere, how are these jobs not good enough?
That same argument also argues that a job for $1 per hour is reasonable, or that a dangerous job is OK. Do you believe that jobs need minimum standards to protect the most powerless in our societies? Most first world countries accept that restrictions are necessary, and many restrictions have come about to avoid the gross abuses that occurred without restrictions.
All minimum standards hurt some proportion of potential employees, and any one average individual may have a significant marginal gain by ignoring the standard.
The judgement to be made is about whether the potential for benefits is realised, and how much the harms are restricted, and how much the harms are not concentrated on particular subgroups.
I believe the fix is to give people a minimum safety net, like UBI and single-payer healthcare, instead of banning jobs that don't meet certain financial requirements.
The issue is that some people are desperate so that's what should be addressed, not that Uber only pays $x/h to a college kid that wants to make some money on the side to go out with friends.
> If they can't find work elsewhere, how are these jobs not good enough?
Jesus man, did you just write that? Seriously? WTF? The fact that our society's economic structures do not allow these people meaningful employment is NOT justification for some capitalist to come along and exploit them as modern-day coolies. Rather, it is justification for reforming those structures so these people can obtain meaningful employment. Get your head on straight man, you are off-base.
So you're argument is that they should be grateful that they could be wage slaves on the most precarious edge of society because they weren't lucky enough to be a software engineer/VC? Don't you see why this comes off as problematic?
When the alternative to being a "wage slave" is being unemployed, then no this doesn't come off as problematic at all. Lyft and Uber drivers aren't slaves. They chose this line of work on their own volition. You might think that those jobs aren't good - and for someone with your skillset that's probably true. But what makes you think you're more qualified to make life decisions for people you don't know?
As the above poster wrote: ride share drivers that can get better jobs quit and take their jobs. It turns out, though, that there are a lot of people for which driving for a ride share company is their best opportunity for their skills and schedules.
No, the alternative to being a wage slave isn’t to be unemployed. The idea that all gig economy jobs will go away if labor costs rise and they pay more humanely ignores basic economics.
> The idea that all gig economy jobs will go away if labor costs rise and they pay more humanely ignores basic economics.
What? I really had to do a double take.
If the net cost of employing a driver rises while the revenue per employee stays the same, then the business could easily become non-profitable. If each driver is netting the company an average of $200 in profit per month, and the insurance they now have to buy costs $300 per employee then now the company is losing $100 per employee. And that's a conservative figure for healthcare, the average plan in California costs over $400 per employee [1].
I'd have to say the same thing back to you: claiming that jobs are secure even if authorities mandate a substantial per-employee expense ignores basic economics.
What does “problematic” even mean? Either they have other options, in which case driving is entirely voluntary, or don’t, in which case prohibiting them from it is outrageously evil. I would also like everyone to live life of leisure and free of worries, but you cannot legislate this into existence just like that. Banning driving for hire won’t make better options appear.
If they have so few options, why do you think it's a good idea to make it un-economical for them to work as taxi drivers?
Uber and Lyft are already massively unprofitable. If you require them to give drivers expensive benefits, they are either going to raise their rates or cut driver pay (probably a little of both). If they raise rates, fewer people are going to use their services, and they are going to have to cut drivers.
You're basically advocating for a fraction of their drivers to be put out of work so that Uber can give the remainder better benefits but a reduced income.
The best way to give drivers better treatment is to make sure a competitor like Lyft is around. A driver to them is worth more than a single customer.
I've also never encountered a driver that actually complained about Uber/Lyft. As far as I know the conditions with Uber/Lyft are still much better than with cab companies of days past.
You argument assumes that everyone doing what is best for themselves _individually_ is best for everyone _collectively_, which is a tragedy of the commons type scenario.
It could be argued that the very idea government – which in some way is in charge of prioritizing and allocating resources on a macro scale – is founded on the antithesis of this assumption: that in the long run what's best for everyone isn't always aligned with the short term, and they're tasked with the balancing act. Different governments tend toward different extremes, of course, but every government is on the spectrum.
If individuals doing what was best for themselves at the present moment was intrinsically tied to longterm collective stability and wellbeing, then we wouldn't need government at all!
This is all an abstract way of saying that: yes, all of those customers and employees at a Walmart in small town may be doing what's best for themselves individually by working and shopping there at the time, but once Walmart puts all those mom-and-pop shops out of business, the only place for people to work now is Walmart, the only place for people to shop now is Walmart, those who set up shops in the town (who are statistically more likely to have kids and homes in the area) now have nothing tying them to the town (and indeed, may be incentivized to move out to somewhere else to set up shop!), home vacancies go up, community events die out, and suddenly your town is a glorified Walmart parking lot off the side of a highway, and not much else. So yes, you yourself may have gotten your eggs for 20% cheaper for a time, but was it worth the longterm detriments to your home?
Hyperbolic, yes, but I've personally seen this happen to a small Texas town I drive through year after year (though, as with any rural town, there's a lot of other factors at play): eventually the protests stopped and Walmart set up shop next to the local grocery store. The grocery store went out of business, even though everyone knew the owners. The grocery store lot sat and still sits vacant. Eventually the grocers moved away with their family. The sports team shuttered in the next 3 years. Then the local school merged with the new, consolidated county school. Then the Walmart eventually closed to lack of customers. The "downtown" is a shell of what it once was, with most businesses closed and some historic buildings once worth being proud of just 10 years ago now literally crumbling beyond repair.
>If individuals doing what was best for themselves at the present moment was intrinsically tied to longterm collective stability and wellbeing, then we wouldn't need government at all!
I don't think that this helps your argument as much as you might think. Governments didn't spring up as some kind of a mutual agreement in society to benefit everyone. Governance in most places arose after someone conquered and subjugated them. Then through a very long cycle of violence and subjugation we arrived at more modern forms of governance, where governments pretend that it's for the good of the people. Yet at the same time those governments will not give people a choice - they will use force to make you comply. That is to say, we need governments to protect us from other governments. Nobles/royalty didn't rule because they all wanted to improve the lives of people. They ruled because they were nobility/royalty.
I think our arguments actually agree with each other: back then (and I concede now, to some degree), it was in the interest of a few to subjugate the many (as in, nobility carving out a political ruling class for their own advantage): if you could be rich and powerful, with little to no consequences, why wouldn't you. That's certainly in your individual interest. Collectively, though?
It could be argued that, because the powers that be willingly prioritized their individual interest over their subjects ' collective wellbeing (be it intentionally "Let them eat cake"-style or because they were just dysfunctional rulers who couldn't keep their subjugates from starving, it doesn't matter; either way they dedicated more resources to themselves at the expense of everyone), these rulers were overthrown: the United States Declaration of Independence, the Magna Carta, the French Revolution, the Bolshevik Revolution, the Cultural Revolution, etc. were all products of the elite few irresponsibly divvying up resources for themselves to the point where their subjects decided en masse it would be better to fight to change the system and possibly die rather than live under present conditions; regardless of how each of those revolutions turned out, what is clear is that if the government (or whatever powers that be) prioritizes its own interests too much over those it supposedly represents, it, too, will be overthrown (or at least, changed by external forces).
Modern day governments have an intrinsic interest in making sure that doesn't happen, and a big part of that means making sure society is collectively content enough to not pull the plug. But now I'm just philosophizing.
As an addendum, it's not like this had to happen, even if Walmart moved in: one possibly politically extreme example is the town government could have mandated Walmart could only sell certain things, or put a price floor on certain items, so as to incentivize people to go to the grocery store for some things and Walmart for others (particularly things the grocery store didn't carry). This could have been a better situation for everybody long term – the grocery store might still be in business, the Walmart could still be there, and the citizens of the town could still be saving money; nobody would be making as much profit or saving as much in purchases as they _could be_, but everyone, not just one entity, still comes out ahead. Of course, in our current winner-take-all society, such an approach would be a nonstarter (and probably even illegal).
Prioritize sustainable growth over short term growth.
On the contrary, rideshare driving shares many similarities with non-contract work:
- There is no salary negotiation for each job. Earnings are unknown until after the job is completed. This is worse than both normal 1099 contract work and hourly wage work - but it more closely resembles hourly work than a freelancing situation.
- Drivers do not choose work based on accepting the full parameters of the job (pickup and dropoff location). They have to accept the job without knowing all the conditions like a contractor would.
- The company tells the “contractor” what to do in the sense that refusing too many pickups punishes and de-platforms the driver. In other words, once you are “on the clock” you have to perform all tasks assigned to you or face disciplinary action, a subordinate situation similar to an hourly job. The only difference is that you can clock in or out when you want.
I'm not sure what the Uber/Lyft apps look like from the driver perspective currently, but they could theoretically be made to accept those parameters. For example, the app could show drivers a list of nearby requested rides (pickup and dropoff), have the drivers bid on each ride, and grant the ride to the driver who bids the lowest (or let the rider pick).
If ride-sharing apps switched to such a system would it then satisfy you to declare drivers contractors?
I'd expect Uber and Lyft could easily implement a system to do just that, but I'm not sure it would make the situation any better for riders or drivers. Riders would now have to wait longer to get a ride and drivers would have to be constantly typing bids into the app to try to win their next trip. It's not obvious to me that this would alter driver compensation in any meaningful way.
Someone always says this, but its an emotional, irrational non-argument and hard to respond.
Your argument is that someone unemployed and starving found a job where they could feed themselves - but its not a good enough job? What exactly is your argument?
> Your argument is that someone unemployed and starving found a job where they could feed themselves
Ah but that's the rub. They still can't feed themselves, but it's the only job in town, and some money is better than no money.
If we don't create a set of rules that prevents the behavior of places like Walmart, it allows them to create a monopoly of available jobs in an area by being the only one who can operate profitably (or can absorb a loss until all other choices are gone).
At that point they can create jobs that aren't good enough, but also leave no other choice.
Say we ban these kinds of low quality jobs. Where will these new jobs come from? Let's say you have a medium to small sized town/city. Which do you think is more likely the trend:
1. New jobs will spring up in the place of Uber driving that will be better and the level of employment stays the same or increases.
2. New jobs will spring up, but there's fewer of them and the level of employment decreases.
I would have to go with #2. Urbanisation has been happening for a long time. People most often move to big cities because of work. I'm from a former Soviet country and most of our small towns and villages are dying because there are so few jobs. If those places set a really high bar for jobs then those areas would die even quicker. The same thing can happen in bigger and richer cities. Detroit is an example of that.
I will concede that some people do get stuck in jobs and could do better and some areas get stuck with jobs that can do better. However, this makes it a question of how far should we go rather than if done at all. Even very bad jobs for starving people are likely a net benefit, but few people in the US are actually starving.
People in the US often confuse being hungry with starving. Being hungry is a product of habitation. Someone who eats a lot will generally feel hungry on a diet that most people would be satisfied with. I'm one of those people. If you fed me a diet many people I know eat, I will feel hunger, but I certainly won't be starving. Over time, my body would acclimate and I wouldn't feel as much hunger.
Starvation and malnutrition are problems worth worrying about. Hunger in the absence of starvation or malnourishment is not.
> They still can't feed themselves [...] some money is better than no money.
I dont see how the first half changes the argument, as the second half points out.
> If we don't create a set of rules that prevents the behavior of places like Walmart
We have rules. Monopoly-busting is a fundamental role of the government. Corporations can accrue more power than their surrounding communities, as history has shown. Besides, other corporations oppose the actions of Walmart, keeping them in check - capitalism!
What is the other option? To dive into the deep end: the failure mode of capitalism appears to be the blending together of government and corporations/money to reduce the regulations that prevent strictly free-markets from being inherently self-destructive. However, the other options start from this premise! When the government already owns AND regulates the corporations, the only game in town for monopoly busting is violent revolution.
> But the real world doesn't work that way.
Previously, American capitalism has driven an increase in the world's standard of living by a staggering amount. Currently, it certainly appears there are some fundamental flaws not being addressed, but I don't know what we should do aside from return to the same capitalist system just without the corruption.
I think libertarian ideals with a basic social safety net is ideal.
Make it so that employee protections aren't necessary by giving people the safety to walk away from bad contracts.
If we had universal healthcare and UBI and minimum income, you wouldn't need minimum wage laws anymore, because no one would take a job for $1/hr if they could just sit at home, and that's a good thing. Or maybe they would because that extra $8 a day would mean something to them. But at least they would have the freedom to do it.
I'm ok with the government being in charge of wealth redistribution, because that is where the pure libertarian system fails.
There is no safety for people who can't work, just aren't smart enough to work, or were not born into a situation where they can get the basic education needed to be successful.
One of the main problems with libertarianism is that how you fare is highly dependent on what resources you start with (ie what you were born with and what your parents have). If we can even that out a bit, the system would work much better.
Please avoid calling arguments emotional / irrational just because you disagree. The parent argument is that people are forced into bad situations by contingencies that aren't facts of nature but human policy choices. There's nothing emotional or irrational about that.
> Please avoid calling arguments emotional / irrational just because you disagree.
I wasn't.
> people are forced into bad situations by contingencies that aren't facts of nature but human policy choices.
What human policy choices are forcing ride-sharing companies to provide jobs to people that HN commenters think are substandard but 100% of people do willfully?
You're going to have to do more work to justify dismissing an argument out of hand than simply calling it emotional.
> 100% of people do willfully?
You've personally interviewed every gig worker? Do you really think every single one of them would agree that there are no coercive forces at play here?
> You're going to have to do more work to justify dismissing an argument
I did. You have ignored half of my comments both times you replied.
> You've personally interviewed every gig worker?
There is a process to become a driver that people must choose to do. They also stop driving the second they don't do it purposefully. How do you think they're NOT choosing to do it?
> no coercive forces at play
I have no idea what you're driving at. No one chooses to be born, no one chooses the cell structure that requires consumption. There are thousands of choices we don't make to live in society.
> I have no idea what you're driving at. No one chooses to be born, no one chooses the cell structure that requires consumption. There are thousands of choices we don't make to live in society.
"Your argument is that someone unemployed and starving found a job where they could feed themselves - but its not a good enough job?" is not an explanation for why the argument is emotional.
> How do you think they're NOT choosing to do it?
Because I don't have a idealistic view of free will that assumes all choices are ultimately unconstrained? I view the distinction between an armed robbery and being forced into a job to prevent starvation only a matter of abstraction not kind.
The drivers might feel that they need the job, and they even might feel “coerced” in some abstract sense, but most definitely it’s not Uber or Lyft that’s coercing them to drive, and you’d have a hard time finding drivers who believe they are forced to drive by Uber. They often believe they aren’t being paid enough, but if they feel coerced to work, it’s not by Uber, but rather by hard facts of the social reality they found themselves in.
But if it's not Uber or Lyft that's coercing them to work for them, then putting more restrictions on their ability to work for Uber or Lyft is highly likely to end up harming them.
The whole moral argument behind laws like AB5 is that it's Uber that's ripping off the drivers, who are helpless and powerless, and cannot do anything to stop getting short end of the stick. The legislature then decides that they should adjust the terms of the contract to be more fair in the legislature's opinion. However, this whole argument hinges on the question whether the drivers are in fact coerced or defrauded: if the drivers are free to quit working for Uber at any point, and yet they don't, how can you argue that they are being coerced by Uber to anything? Usually it pivots to the argument that it's the hard facts of social reality that "coerce" them to work, but then regulating Uber in particular seems unwarranted, because why is Uber singled out, instead of other options that are even worse, as shown by the fact that the drivers choose Uber instead of those even worse options?
I think that the point of view of "social reality coercion" is also ultimately misguided as a tool to explain the political decisionmaking. Consider this: imagine California institutes UBI (and ignore for a while the question of how to pay for it). Do you think that California would also repeal all kinds of labor regulation, including AB5? That since the drivers, or waiters, or everyone else now has an option of just leaning on their UBI, and no longer be coerced to work by social reality, those regulations are now superfluous, and the people who don't like the deal presented by Uber or Amazon can just leave instead of taking it? I seriously doubt that it would happen. I think that the desire of government and the society to micromanage other people's lives is too great to resist, and the "coercion" is just an excuse to get moral justification for meddling in the deals other people make.
> hard facts of social reality that "coerce" them to work, but then regulating Uber in particular seems unwarranted, because why is Uber singled out
I'd agree that this is a more effective path than attempting to regulate Uber, but also do not think it's mutually exclusive with the view that Uber has exploitative labor practices, even if they are not directly coercing drivers to work for them.
> I think that the desire of government and the society to micromanage other people's lives is too great to resist, and the "coercion" is just an excuse to get moral justification for meddling in the deals other people make.
This only seems like a relevant argument if the sole purpose of UBI is to create some kind of deregulated libertarian society. I don't view deregulation and UBI as being intrinsically linked -- indeed I would prefer to see UBI and more regulation.
> I'd agree that this is a more effective path than attempting to regulate Uber, but also do not think it's mutually exclusive with the view that Uber has exploitative labor practices, even if they are not directly coercing drivers to work for them.
Right, but my point is that it shows where the priorities are, that it's not about actually helping people.
> This only seems like a relevant argument if the sole purpose of UBI is to create some kind of deregulated libertarian society. I don't view deregulation and UBI as being intrinsically linked -- indeed I would prefer to see UBI and more regulation.
That's exactly my point: some people just have a strong desire to have a say in everything. It's perfectly natural thing for human to wish for, the power to control everything. What we actually want as a society from our superiors who rule us though is to control things for our benefit, not to allow them to satisfy their power urge.
When you say you want "more regulation", you most likely mean "more beneficial regulation", because I'm quite sure you can imagine all kinds of detrimental regulation that could be introduced (and if you're having trouble, just think of what kind of regulation your political opponents would introduce). To circle back to the Uber question, when you regulate the its relationship with its drivers, you need to ask yourself: who's benefiting? Who's losing? Is the regulation bringing surplus for everyone, or does it actually result in deadweight loss? If, for example, you require Uber drivers to be paid at least $200/hour, everybody loses, because hardly anybody is going to take the cab anymore, and we're all worse off.
If you don't do this analysis, then the regulation becomes pure exercise of power, of the ability to control the world as you please. That's not what the society signs up for in representative democracy, and I don't think you really want more of that.
When it comes to Uber, it's more difficult for me to consider because I'm less sure of the social utility provided by the application, particularly when we take the massive unsustainable subsidies out of the picture.
I think the entire question is distorted right now by the fact that they've been in massive growth mode for years so we don't actually know what the equilibrium of the gig economy looks like in many markets.
But the subsidies make it even less of a reason to regulate the employment relationship between Uber and the drivers. The extra money can only be used to artificially inflate the earnings of the drivers, not to depress them. What happens is great transfer of money from the pocket of investors to the pockets of drivers, and the regulation are trying to reduce it.
The subsidies only make it a less-worse bad idea. Particularly when you take into account things like predatory car leases many drivers take out.
Like, I think there are interesting broader questions here about regulation and the social safety net -- but I think we need to be clear that Uber is basically a payday loan on your car's title. People are bad at understanding depreciating assets.
Maybe if there were a stronger social safety net there would only be a labor market for drivers for whom Uber is actually a good fit? It's certainly possible.
I think we need to be clear that Uber is basically a payday loan on your car's title. People are bad at understanding depreciating assets.
This is simply untrue. Cars do depreciate, but not so much to make the whole business unprofitable.
A double digit percent of the Uber drivers (probably even close to half of all) drive in rented vehicles. Hertz for example has a program[1] where you pay $200-300/week for renting a practically new vehicle. This makes the depreciation costs explicit to the driver. I think Hertz has some pretty good experience with valuing vehicle depreciation. Assuming Uber drivers do 1000-2000 miles a week, Hertz rate translates to something like $.10-.20 per mile in vehicle depreciation & maintenance. A non insignificant cost, but hardly a deal-breaker.
Maybe if there were a stronger social safety net there would only be a labor market for drivers for whom Uber is actually a good fit?
Maybe now there are drivers for whom Uber is actually good fit? Have you talked to your drivers? In my experience, most of them are pretty happy about the arrangement in general, and the only complaint is low rates.
What "bad work" were people doing before Uber and Lyft? Were all of these people previously unemployed before these companies came around? Did any of these drivers quit other employment to be an Uber or Lyft driver?
In the case of Walmart, the issue is that Walmart operates at such scale, and can afford to take short term losses, allowing them to make the "volunteer" behavior of individuals in the community be that smaller stores go out of business, giving people few other choices as to where to shop and work other than Walmart.
To make a tortured analogy to illustrate a point, are the victims in the movie Saw not responsible for their own deaths, as they voluntarily chose the actions which lead to their untimely deaths?
Voluntary choices don't imply preferrable or desirable choices. When Walmart arrives and lowers prices to the point of bankrupting small business in the town, residents certainly welcome the provided conveniences and lower prices, but are faced with the choice between paying higher prices, or paying lower prices and destroying small business within their towns. Humans aren't perfect economic machines, so they're likely to pick the lower prices, paying the long-term consequences for those decisions. Hence, people don't want Walmarts moving into their towns, since the outcomes are fairly predictable at that point.
I don't agree that this is a negative long-term consequence, but I see your larger point. Do you think the government is capable of correcting problems such as these without negative consequences?
> Voluntary choices don't imply preferrable or desirable choices.
But what other metric is there? You intend for the government to regulate into existence preferable or desirable for everyone?
> Humans aren't perfect economic machines,
Should the government force people to do what's best for them against their will?
> I don't agree that this is a negative long-term consequence, but I see your larger point. Do you think the government is capable of correcting problems such as these without negative consequences?
No I don't believe that it is possible to avoid negative consequences with government correction. That said I don't think it's possible to avoid negative consequences with strictly market solutions to certain classes of problems, so I think each case needs to be taken on its merits.
With Uber and Lyft for example, I don't really see a problem with what they're providing people, in the same way I don't see a problem with check cashing stores or most classes of short term loan companies. The problem with Lyft and Uber IMHO is with how the service they provide interacts with the systems of today, a system where healthcare and benefits are tied to full-time employment. Gig economy companies compete quite favorably on price with companies offering full-time employment, meaning the country is shifting in parts from a workforce that had healthcare and benefits to one that doesn't. I think it's worth the government looking into its laws and the countries systems and wondering if there is a better way to classify employment and to have people acquire healthcare and benefits.
> But what other metric is there? You intend for the government to regulate into existence preferable or desirable for everyone?
> Should the government force people to do what's best for them against their will?
In the case of broad market inefficiencies I think there is a case to be made for it. Tragedies of the commons, public health issues, etc.
By that logic, what's even the point of making laws to protect the rights of employees? As long as working is voluntary, people should be able to walk away from abusive workplaces, correct?
Possibly, but only because labor costs would rise. It would be a wealth transfer. Rents might rise, but so would taxes for those collecting rent (presumably they are on the upper end of the income/wealth scale).
Independent journalists can incorporate and offer services b2b, or they can be hired as employees. If the work isn't worth enough for employers to pay minimum wage and a share of taxes that is really a problem with capitalism more than this specific distinction.
Under AB5 the business to business exemption allows independent contracts who incorporate or otherwise form a business(including sole proprietorship) to avoid the new ABC test if they meet certain criteria. Being in the same line of business affects some of the criteria, but no single factor is dispositive.
The exemptions were very imperfect. Even if musicians and certain types of performers were exempted, this legislation has had an enormous effect on theater organizations, for example, especially at the semi-professional / community level. It's typical for these orgs, which have very limited budget, to hire actors and the creative team (set designers, lighting designers, sound etc.) as 1099 workers. The money is simply not there to be able to pay everybody at an hourly rate for the amount of time that's actual spent on these projects, and the outcome has been that many theater companies are unsure whether they can continue to operate at all. Unless the thinking has changed recently and my understanding is out of date, this is a situation that continues to be worrying to both theater artists and directors of theater orgs.
> AB5 was a terribly written law with good intentions (aren't they all?).
Not at all. How many bills have you read? Did you study political science? Have you not seen how you’ve personally benefited from the laws (and case law) on the books? Or could you be perhaps overgeneralizing?
> it killed independent journalism in the state
This seems patently false given that I read lots of independent journalism from California journalists every day. Maybe you are conflating independent journalism, the sort that exists in an organization devoted to practicing journalism that is not subordinated to the interests of another organization, with freelance journalism. (And you’d still be wrong, but at least choosing the right words. “Independent journalism” has a longstanding meaning.)
The big companies they were obviously targeting have the resources to get around it, but in the meantime it killed independent journalism in the state, as an example.
I know a few journalists who can no longer work in CA, despite liking the system they had. The publications won't touch them for fear of violating AB5.
There are lots of other folks in CA who like being contractors who are finding it much harder now, because the people hiring them are afraid of running afoul of AB5 but also can't afford to hire them as employees.
They really need to scrap AB5 and rewrite it, now that they've seen how much it missed the mark.
AB5 has had a chilling effect on 1099 work in California.