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Uber and Lyft drivers remain independent contractors in California Supreme Court ruling

The California Supreme Court ruled Thursday that app-based ride-hailing and delivery services like Uber and Lyft can continue treating their drivers as independent contractors rather than employees.

The unanimous decision by the state’s top court is a big win for tech giants. It also ends a yearslong legal battle between labor unions and tech companies over a law dictating the status of app-based service workers in the state.

The ruling upholds a voter-approved law passed in 2020 that said drivers for companies like Uber and Lyft are independent contractors and are not entitled to benefits like overtime pay, paid sick leave and unemployment insurance. Opponents said the law was illegal in part because it limited the state Legislature’s authority to change the law or pass laws about workers’ compensation programs.

snooggums ,
@snooggums@midwest.social avatar

ride-hailing

Taxis. Just call them taxis.

Ep1cFac3pa1m ,
@Ep1cFac3pa1m@lemmy.world avatar

Sounds like drivers need to form a trade union.

Chozo ,

Not surprising. These apps work on an on-demand basis. It's just not feasible to pay somebody an hourly wage when you can't guarantee any work to be available for them to do at any given time. And you could then make the argument of "if they can't afford to pay them like employees, they shouldn't be in business", and I'd like to agree, but ultimately there is a huge demand for this line of business to exist and that isn't going away any time soon, especially as car ownership is decreasing in some areas these days. Most of these apps have yet to ever turn a profitable quarter, as is it, so increasing their cost of business isn't exactly going to result in everybody getting raises.

Also, there's generally a pretty big reason why people take these jobs over a traditional 9-5 in the first place; a large amount of these workers prefer working their own hours and not having to report to a superior. Or due to whatever life circumstances they might be experiencing (mental health issues, homelessness, disability, criminal history, etc) may prevent them from securing a "normal" job. A majority of the people working on these apps would find themselves unable to keep their jobs because they couldn't be available on time for whatever reason they may have. Ultimately, classifying them as employees would hurt a lot of them, and will likely drive them to another gig business (like food delivery or handyman/TaskRabbit, etc) where they'll be exploited the exact same way all over again, but now without any of the stability they had with their previous work.

I'm not saying all this in defense of these apps. But I do work on the corporate side of this industry and talk to the contractors on a daily basis, so I'm pretty familiar with the motives people typically have for signing up to work for these apps. As odd as it may sound, many of these people want to be contractors; they just want a better cut of the payment.

It would be great if there was an alternative that could cut (or at least reduce the need for) the middleman and allow users to be paired with a contractor directly. I'm surprised that there hasn't been any real attempt to make one yet.

Steve ,

It’s just not feasible to pay somebody an hourly wage when you can’t guarantee any work to be available for them to do at any given time.

Of course you can! Every store does it every day. I take Xrays in a hospital. Some days we are absolutely slammed. Others we sit around twiddleing our thumbs on Lemmy. Either way we get paid the same hourly rate.

This is all complety normal and common.

Chozo ,

Yes, but that assumes the workers are at where they will be working. That's not the case with gig work like ride sharing. With a store or a med lab, you know where everybody needs to be, and when they need to be there. But with a gig job, your driver may be coming from the other side of town. A driver can be waiting all day for a request to come in, but if there's just no business in their part of their city that day, there's no work available.

While you can plot for trends on what areas will be busy at what times, the core function of these apps is that they're on-demand, so there will always be a matter of randomness. Sometimes business will spike or plummet in a city for no apparent reason.

The issue stems from the lack of predicability in a volatile market that relies entirely on the whims of the users. People want a service that's available as soon as possible, at all times of day, with zero advance notice. "It's 3am and I want this specific burger from this specific restaurant and I will pay somebody to go right this minute to pick it up for me". That is not easily predicted, and impossible to properly schedule for. It's a flaw in the way these businesses are designed, but ultimately unavoidable based on what users of the platform want the platform to be.

Another factor to consider is that to make it work, the service would need to cost more. Remember, these companies are generally not profitable as it is, so its not as if they're making bank on the fees to begin with, so increasing fees for the users would be an unavailable certainly if drivers were to be considered employees. But there's a limit to what most users are willing to pay, and these apps have all pretty much capped out at those limits already. So upping the fees means pricing out large swaths of their customers, which means less available funding to pay drivers. Now you're introducing layoffs to workers who were previously immune from being laid off.

It's a very complicated and chaotic situation to untangle, and one that doesn't have a simple, punchy solution.

Steve , (edited )

None of that is special or different. EMTs are paid hourly. You never know where a call will come in. It’s literally the same business.

catloaf ,

Yeah, they’re engaged to wait. They work specific shifts. Uber drivers work when they want to, and setting your own hours is one of the characteristics of an independent contractor.

Randomgal ,

What you are saying is “It’s okay to keep exploiting them because we need the service they provide, and cheap.” Fuck you.

These companies haven’t turned a profit.

You realize that’s on purpose, right? It’s accounting magic to pay less taxes and to feed people like you propaganda to parrot. There definitely is enough money to pay the executives fat bonuses. (But those are “expenses”.)

Everyone deserves fair pay, job stability, HEALTHCARE and other benefits. If YOU can’t afford the LUXURY of an Uber unless the guy who drives you is being fleeced because otherwise he can’t feed his family, the solution is not to exploit the workers. It is to not take an Uber.

Chozo ,

What you are saying is "It's okay to keep exploiting them because we need the service they provide, and cheap." Fuck you.

That's absolutely not what I'm saying, and fuck you for insinuating it. I'm saying it's more complicated than some eye-grabbing heading will have you think, especially when you're not taking the actual workers' motives into consideration.

Everyone deserves fair pay, job stability, HEALTHCARE and other benefits. If YOU can't afford the LUXURY of an Uber unless the guy who drives you is being fleeced because otherwise he can't feed his family, the solution is not to exploit the workers. It is to not take an Uber.

I agree completely. But some people need an Uber. Ride sharing has offered a lot of people some amount of independence they might not otherwise have, given the state of transit options in their area. In fact, I'd argue that most Uber users do so out of need instead of desire, given how outrageous the prices are.

odium ,

In my opinion, your “some uber drivers prefer contracting” argument has merit. But your customer arguments don’t. Taxis have existed and did the same things uber does from the perspective of the customer for decades. Ubers are now often more expensive than the taxi. There wouldn’t be a change from the customer’s side.

Randomgal ,

That’s absolutely not what I’m saying…

Okay bro it’s not like the text is right there. Lol

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