back to article California Attorney General asks judge to force Lyft and Uber to classify drivers as employees – or else

California's Attorney General and the City Attorneys from Los Angeles, San Diego, and San Francisco have asked a judge to force ride-hailing services Lyft and Uber to classify their drivers as employees. Lyft and Uber, which remain very unprofitable, have been defining their drivers as independent contractors (ICs). Doing so …

  1. HildyJ Silver badge
    FAIL

    Less a Lyft and more a Heist

    Lyft, Uber, DoorDash and others offer no more users than traditional, employee based, taxi and delivery services. Except lower prices which result from the poor wages, lack of benefits, and tax evasion the law is designed to prevent. Despite millions spent in advertising, the original referendum passed. Despite millions spent in lobbying, the law passed. Now they're spending millions more asking for a do-over; all to benefit their CXO's and investors.

    1. julian.smith
      Mushroom

      Time is not on their side

      Cash burn at Uber's pace can only last for a while.

      There's a limit to funding stupid ... might take a while to get there

      1. Anonymous Coward
        Anonymous Coward

        Re: Time is not on their side

        and in the meantime the original promoters of these Ponzi schemes will have sold off their holdings to more stupids.

    2. Dave314159ggggdffsdds Bronze badge

      Re: Less a Lyft and more a Heist

      Ooh look, a black cab driver...

      "traditional, employee based, taxi [...] services."

      That's just not true. Can drivers are self employed.

      Then again, neither is the rest of your little rant.

      Reality is that Uber cabs are several orders of magnitude safer, considerably cheaper, and pay the drivers better.

      It's also pretty rich when black cab drivers, notorious for not declaring cash in outright tax evasion, accuse Uber of tax avoidance. (I mean, you alleged tax evasion, but it must have been a typo.)

      1. iron Silver badge

        Re: Less a Lyft and more a Heist

        You are Dara Khosrowshahi and I claim my $100.

  2. Chris G Silver badge

    Shirley a better system for the drivers would be a modern equivalent of minicab drivers renting a radio.

    I cabbed in the 80s for a while, drivers typically had a choice of several cab firms to rent a radio from and would obviously go for those companies that had the best controllers and traffic.

    Back then I paid a straight forty quid a week for a radio, so a subscription service to provide fares to drivers should work, with the drivers being required to have a local license they would then become self employed and the likes of Uber would have less problems.

    Ride prices might go up a little but in the best US free market traditions, everything would find its own level.

    1. Headley_Grange Silver badge

      Radio Rentals

      @Chris. Once you got the radio were you free to set your own rates and working times and could you pick and choose your fares?

      1. BrownishMonstr Bronze badge

        Re: Radio Rentals

        Perhaps not if you had a cab company's logo on---as a user, you wouldn't want to be charged different one day to the next.

      2. big_D Silver badge

        Re: Radio Rentals

        It depends on where you are. Here, in Germany, the local council define the rates that can be charged and all vehicles must have a geeichte (calibrated) meter device that is connected to the tacho/wheels and does a distance and time calculation of the fare. You can't charge a deviation from the standard fare.

        The calibration seal needs to be current and the controllers can pull a cab at any time and order it to be re-calibrated. Anybody offering fares has to have such a device, otherwise they face heavy fines. (There are exceptions, such as limosuine services that rent out chauffered vehicles by the hour / day.)

        You also need a professional driving license in Germany, otherwise you cannot get commercial insurance (and private vehicle insurance is null-and-void if you are carrying paying passengers).

        One of the reasons that Uber got into trouble over here - they weren't ensuring that their drivers had the correct license and therefore most were driving illegally in "uninsured" vehicles, at least when they were on the clock.

  3. A Non e-mouse Silver badge
    Facepalm

    The ride-hailing biz also projects that trip costs would increase by anywhere from 25 per cent to 111 per cent

    That's only because you're loosing money hand over fist by subsidising the cost of all rides.

    1. Boothy Silver badge

      Well, that is their Business model after all.

      1. Run at a loss, in order to unfairly undercut local taxi services, gradually forcing them out of business.

      2. Use investor money to keep the company going, and when the balance is looking low, ask for more.

      3. Gain a near monopoly in a given area, due to the competition going bust, at which point increase prices, so you start making a profit in those locations.

      6. Profit.

      If any taxi firm manages to start gaining traction, just drop the price again in that area for a while, and the taxi firm goes under.

      Ultimately this is bad for everyone (customers, drivers etc) except for the investors and shareholders, and even they are playing a long game here.

      Fortunately a lot of local bodies, groups, politicians etc understand this, and so are tying to rain them in before it's too late.

  4. Mike 137 Silver badge

    Whereas in the UK ...

    Unfortunately these excellent arguments cut no ice in respect of IR35. Courtesy of an inexplicable bigotry here in Blighty, as soon as hirers catch on to the advantages, we likely face a future of "Uberized" employment where every new hire is a "contractor" under IR35, saving the hirer all the costs of pensions, sickness and holiday pay and allowing staff to be dismissed on a whim. They've set the clock back 200 years to the days of the early Industrial revolution.

  5. Dave314159ggggdffsdds Bronze badge

    What a load of nonsense. Minicab drivers _are_ self employed. It's hard to imagine anything clearer, in that line.

    Why, it's almost like the taxi cartels controlled by organised crime have been repeatedly caught paying for negative coverage of Uber...

    1. c1ue

      Ride share PR/agitprop has really gone downhill lately.

      I especially like the continued rehashing of right-wing narratives created back when they were trying to break down the unionized cab drivers - now rehashed as liberal tech company nonsense.

      1. Stephen Gray

        Right-wing narrative? Aw bless, you're about 12 years old aren't you? You've read a couple of words online and you spout them to appear clever. Please come back when you're an adult.

  6. IGotOut Silver badge

    Maybe the wording of the contracts would clarify it.

    They are not Taxi's in the UK sense. You get get into a taxi anyway and pay a fixed rate.

    They really are minicabs. The ride is booked and price (should) be roughly agreed in advance. So they should be licenced as such.

    As for employed / self employed, The way I look at it, if they are free to swap "employers" at will, then I would of thought they could be classed as self employed. However, if there is non-compete clauses, or you are penalised for not working for them, then they are employed.

  7. Blackjack Silver badge

    Wait... do they still have drivers?

    Those drivers must be really desperate to keep doing this with Coronavirus around.

  8. KSM-AZ

    It is apparent....

    Most of the people commenting have never driven a cab, or worked in the industry. Cab drivers have generally always leased a vehicle, for a shift, generally 12 hours, and have been independent contactors. In most cases the lease covers, dispatch, and the vehicle, but not fuel. As far as what you charge, that is purely up to you, but cannot Generally exceed the meter, unless they puke in your car and you charge a cleaning fee or something.

    Most uber and lyft drivers drive for both companies. There are tricks to work around and maximize trip charges, so generally they run one or the other, based on situational experience... End up on the west side, switch to Lyft. End up back over on the east, now I'm gonna signin to uber. Many folks do this on the side, some just out of boredom, or a few days a month, to help pay for things.

    It's a decent wage filler if your between jobs. Places with the most rules, generally have the worst cabs.

    1. RobbieM
      Devil

      Re: It is apparent....

      Is it financially viable to have all the correct insurance etc. in place to do this a couple of times a month or are we all at risk of not being covered in case of an accident? Why are they called ride-sharing when they are obviously just minicabs? Surely ride-sharing is when you and the driver are going to the same destination not when you call/use an app to order a car to pick you up.

  9. bombastic bob Silver badge
    Unhappy

    Lyft argues that AB5 is poorly drafted and has destroyed thousands of jobs.

    (from the article)

    Lyft argues that AB5 is poorly drafted and has destroyed thousands of jobs.

    And, they're right. People like musicians and handymen are probably the hardest hit by this. You know, the kinds of things that people do OUTSIDE of a corporate+payroll environment, the kinds of which have been done "since civilization", from services like cleaning and gardening, to a clown at your kid's birthday party, and the accountant that fills out your tax forms. Most often these people ARE independent contractors, now apparently ILLEGAL because you didn't pay the payroll taxes, offer them insurance, paid vacations, minimum wage, and deduct various 'withholdings' from their paychecks and THEN distribute those withholdings to the multiple tax authorities, etc. etc. etc.. The 16 year old kid who babysits your offspring is an independent contractor, too. So much for earning money when you're a kid... [the list of things WRONG with AB5 is huge]

    And, apparently, all of this was done to "get" Uber and Lyft. No need to ask 'why' either. 'Gummint'. It's what they do.

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