By on August 20, 2020

As Uber contemplates ways to avoid having to close up shop in California following the passing Assembly Bill 5, Lyft is simply suspending operations as it waits to see how the appeals process works out.

On Thursday, the fuchsia-themed ride-hailing firm said it would not be able to maintain business as usual in the Golden State, citing several of the reasons we prognosticated in yesterday’s article about Uber mulling a franchise model. Included in the release was an inability to hire enough drivers in a manner that would appease the new law, resulting in reduced service (especially in suburban and rural areas), and a pricing increase deemed unfeasible for existing customers if implemented.

Lyft said it did not want to cease offering rides in California, adding that it is committed to fighting for a benefits model that works for all drivers and passengers, but circumstances left it with precious few alternatives, none of which seem workable at present.

From Lyft:

For multiple years, we’ve been advocating for a path to offer benefits to drivers who use the Lyft platform — including a minimum earnings guarantee and a healthcare subsidy — while maintaining the flexibility and control that independent contractors enjoy. This is something drivers have told us over and over again that they want.

Instead, what Sacramento politicians are pushing is an employment model that 4 out of 5 drivers don’t support. This change would also necessitate an overhaul of the entire business model — it’s not a switch that can be flipped overnight.

It also requested customers vote on a November ballot measure (Prop 22, also backed by Uber) that allows app-based drivers to be classified as independent contractors instead of regular employees. While plenty of drivers have bemoaned stringent regulations that would prohibit their ability to work during their free time and force them into a more traditional workday, many have advocated for fairer treatment by the companies.

Since Uber and Lyft don’t allow drivers to set their own rates, classifying them as contractors is at odds with the legal definition — even though most states haven’t offered much pushback. But Assembly Bill 5 effectively requires all companies to reclassify independent staff as employees, with few exceptions. This places a legal obligation on the ride-hailing firms to provide drivers with workers comp, unemployment, paid sick/personal leave, health insurance, and more. These are things they cannot afford, especially since neither Uber or Lyft seem capable of making money without being propped up by the stock market.

[Image: Jonathan Weiss/Shutterstock]

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63 Comments on “Lyft Abandons Operations in California Following Court Decision...”


  • avatar
    conundrum

    The state has prevented us from exploiting workers, so we’re leavin’ town. Signed: Lyft.

    • 0 avatar
      brn

      Except they’re not workers.

    • 0 avatar
      Cicero

      No. The state has prohibited grown adults from entering into a mutually-advantageous business arrangement. Do you like the state being your mommy and deciding IN YOUR PLACE what’s good for you and what isn’t? I sure don’t. I think American adults should be allowed to make their own decisions without a paternalistic Big Brother butting in to veto me “for my own good.”

      Also, don’t be duped by the “employee exploitation” cover story. The reason this is happening is that ride-sharing has finally given the miserable taxi industry some long-deserved competition. Rather than clean up their abysmal act and finally provide decent service at a decent price, they shower the Legislature with money to get it to outlaw their competition.

      It’s just a grift-ridden scam by the Legislature, nothing more.

      • 0 avatar
        Old_WRX

        Cicero,

        ‘I think American adults should be allowed to make their own decisions without a paternalistic Big Brother butting in to veto me “for my own good.”’

        California seems to think the government should decide pretty much everything for everybody supposedly FYOG (for your own good). What else would you expect from the state that enacted the ludicrous Prop 65?

      • 0 avatar
        R Henry

        @Cicero: Your first paragraph can certainly also apply to prohibitions against prostitition, narcotic usage, and even suicide. Yours is a textbook libertarian argument. Libertarianism has a VER small constituency in California.

        As California resident myself, I am increasingly considering evacuation. A recent trip to Bryce Canyon National Park, in Utah, illustrated how wonderfully other States are managed. Comparing Utah and California governance is analogous to comparing Heaven and Hell.

        • 0 avatar
          CKNSLS Sierra SLT

          R Henry-
          As someone who lived my entire life in So. Cal-and then retired (7 years ago) to Utah-your statement couldn’t be more correct.

          My wife and I have a saying-“California-you don’t know how much it sucks until you leave!”

        • 0 avatar
          Art Vandelay

          Only problem with this is that people seem to get downright irate when @HighDesertCat hires a bunch of illegals in what can certainly be described as “mutually-advantagous” (They are likely coming out better than Uber/Lyft drivers), yet people want to regulate that (Though if you really are a Libertarian with a Capital L you are probably cool with that.)

          Sometimes there are some rules.

          • 0 avatar
            Lie2me

            I hear HDC no longer hires kids anymore, too much trouble getting their cages in the back of the pick-up ;-)

        • 0 avatar
          FreedMike

          @R Henry:

          California’s most basic problem is cost-of-living – too many people in too small an area, in a place that’s not conducive to supporting large populations. You can put seven or eight million people in a place like Dallas without too much difficulty because the area can support the population; cities in California can’t.

          Providing infrastructure and basic services in that kind of environment is expensive as hell. And that is the root cause of most of what people find objectionable about the state and its’ politics – they’re trying to deal with what can’t really be dealt with. Not surprisingly, they’re not always succeeding.

          The “escape to Utah” approach just means that eventually, whatever city in Utah you escape to ends up with many of the same problems as California. How do I know? Because I live in Denver, and over the last 25 years I’ve been here, I’ve begun to see a repeat of the same problems you get in places like L.A. – too much traffic, not enough roads, too many people, stupid-expensive housing…on and on and on. It’s to the point I want to “evacuate” too…except I’d evacuate to a place that’s meant to support a lot of people, like the Midwest. I’d miss the climate here, but I’ll trade that for a house I can actually afford to buy and maintain comfortably.

          Like the Eagles said…”when you call someplace paradise, you’re kissing it goodbye.”

          • 0 avatar
            Dartdude

            Colorado problems are because California moved there and bought with the voting habits. In California voters approve any tax that comes along. The state is crowded has water and electrical problems. The new saying is California sucks that why I left

          • 0 avatar
            FreedMike

            Actually, Texas is the largest source of new Colroadans.

            https://www.irs.gov/pub/irs-soi/1718co.xls

            California is second, followed by Florida, Arizona and Washington.

            Perhaps you should do some research before you rant?

          • 0 avatar
            jkross22

            Mike, Coastal California is expensive because of the supply/demand laws. Santa Clarita is a lot less expensive than Santa Monica in the same way that the Springs is less pricey than Denver or Boulder.

            California’s problem is that politicians are telling residents that they can have all of the benefits of a densely populated coastal area with none of the drawbacks.

            As we’ve seen for decades, there’s no getting around supply/demand laws or consequences.

            Unfortunately, the image many people have of Californians being self absorbed dimwits tends to be more right than wrong.

            Best example is the legit concern/frustration with city congestion, so the solution pursued is HSR that does nothing to solve urban congestion, isn’t really high speed and is making Boston’s big dig look like small time graft in comparison to the stunning corruption associated with HSR.

          • 0 avatar
            FreedMike

            @Jkross:

            You’re right, and the driving factor in California’s ridiculous housing prices is high land prices. I underwriter mortgage loans, so I see the appraisals every day – even in less glamorous areas like Santa Clarita, the land value is disproportionately high, and that drives higher housing prices. Like you said…supply and demand. There’s no way around it. I think what California is trying to do is make things livable for the folks who they need living there but can’t afford to buy a house.

            Boulder is ridiculous for the same reason – the folks there basically don’t allow new construction, which they say is about “preserving the character of the city,” but that’s BS – it’s about making the houses they own more expensive. If nothing else, this disproves the idea that folks in Boulder are commies…for dedicated Marxists, they sure have a firm grasp on real estate appreciation.

            Theoretically, Denver should have plenty of room to grow (there’s nothing east of Aurora but a big bunch of nada), but transportation limits the area’s ability to grow. I mean, you *could* build one hell of a nice house in, say, Strasburg or Byers, but getting into town would be a nightmare, particularly if you worked in the Tech Center. I live in Broomfield and my company’s office is in the Tech Center – thank God they let me telecommute, otherwise I’d shoot myself if I had to make that drive every day (I did transit for a while, and it works, but it’s EXPENSIVE, and I ended up spending three hours a day commuting).

            Denver’s infrastructure and road system simply isn’t built for this many people, and there’s not enough money in the whole darn world to fix it. This, more than anything else, is making my good old hometown of St. Louis look more and more attractive as I close in on 60.

          • 0 avatar
            R Henry

            @FreedMike

            CA cost of living iisues are allGovernment created. Water is tight because environmentalists reject common sense management–prioitizing minor aquatic species instead. Housing in SF is sky high due to rent control and red tape for new construction, again, due to environmentalism. Power is exoensive because the PUC wont sign off on new powerplants….because environmentalism. Traffic sucks because envirommental reviews prevent expansion.

            CA is held hostage by environmentalists who flat out reject the concept of comoromise.

      • 0 avatar
        Vulpine

        @Cicero: From what I’ve been reading, my friend, the arrangement is hardly, “mutually beneficial.” The driver gets paid barely enough to pay for gas and maybe a small snack while the company pockets the rest. That’s what I’ve read from multiple drivers who triggered these court proceedings in the first place.

        • 0 avatar
          ScarecrowRepair

          @Vulpine:
          The relationship is between two consenting adults. EVERY trade is between two consenting adults who BOTH think they got a good deal, otherwise they would not have agreed to the deal. It’s one of the most basic concepts: a voluntary trade means both parties think they are better off.

          You don’t get a say. Their deal is none of your business. You don’t get to delegate to the government the right to interfere because you yourself don’t have that right.

          What kind of arrogant know-it-all think he knows more about other people’s business than they do?

          • 0 avatar
            Luke42

            “The relationship is between two consenting adults.”

            Two points:

            1) Lyft is a company, not an adult.

            2) The thinking here is that, if you’re desperate enough to drive for Uber/Lyft, you probably have the economic power to negotiate a decent deal for yourself.

            A relationship isn’t considered to be completely consensual when economic necessity is an aspect of it. That’s why employers can’t demand sex as a condition of employment, for instance, even if it might otherwise appear to be consensual.

            When I was younger and had seen less abuse in the workplace, I was idealistic about the kind of libertarian values the “this is a business deal between conventional adults” kind of argument. However, people will give up whatever negotiating power they have in exchange for survival — and a decision made under duress is hardly a Free decision.

            You don’t have to agree with this argument, but you should understand it — especially given the limits of your argument.

          • 0 avatar
            Art Vandelay

            If you are paying wages that require them to turn around and get government assistance in order to eat, thaen yeah, as a taxpayer it becomes my business.

            Paying drivers was never part of a long term sustainability plan for these companies…they were banking on autonomous vehicles long term. It hasn’t happened.

            incidentally, I am sympathetic to your view. If someone wants to make some extra cash now and then I think this can work. But many of the drivers were pushing for changes here and they have rights too.

            We have laws with respect to wages. Uber/Lyft probably could have simply given their drivers a bigger cut that brought them up to the prevailing wages and this would have never been an issue.

          • 0 avatar
            FreedMike

            “The relationship is between two consenting adults.”

            So is a marriage where one party that is constantly verbally abused stays.

            Unfair is unfair…period. Doesn’t matter if the person who’s being treated unfairly is there by choice.

          • 0 avatar
            FreedMike

            @Art:

            Agreed. Uber and Lyft are special cases. Most companies who employ independent contractors are either small-scale, or their contractors are doing business as a let’s-bring-in-a-few-hundred-bucks-a-month-for-little-Timmy’s-college-fund side-hustle (think part-time REMAX agent, Mary Kay, Scentsy, Pampered Chef, and so forth). If Sue the Scentsy Lady doesn’t get health or disability benefits, whatever – she most likely either has a first job, or her spouse does, and that’s her safety net.

            But both Uber and Lyft have a small army of contractors working for them, and most of them barely make enough to survive. These folks are playing without a net. I don’t care if they’re independent contractors or not – that’s not right.

            Uber and Lyft could have avoided this by either a) increasing rates, or b) providing better, more affordable benefits.

          • 0 avatar
            jkross22

            “Uber/Lyft probably could have simply given their drivers a bigger cut that brought them up to the prevailing wages and this would have never been an issue.”

            From Uber’s website: Financial Highlights for Fourth Quarter 2019

            Gross Bookings grew $4.0 billion year-over-year to $18.1 billion, representing 28% year-over-year growth, or 30% on a constant currency basis, with Rides and Eats growing 20% and 73% year-over-year, respectively, on a constant currency basis.

            And then there’s this>…

            GAAP Net loss attributable to Uber Technologies, Inc. (2)

            $(8,506)

            Net loss attributable to Uber Technologies, Inc. includes stock-based compensation expense of $172 million in 2018 and $4.6 billion in 2019.

      • 0 avatar
        Jimf

        Well said, this was a union backed bill to get more members. They do not care if people lose their jobs if they are not union members.

        • 0 avatar
          -Nate

          Predictable responses from those who’s primary feelings are envy, fear and hate .

          When America’s cities are full of filthy beggars you’ll still refuse to accept the truth and try to blame those who tried to help

          You should be ashamed .

          -Nate

  • avatar
    eggsalad

    I’m as pro-worker as they come. I’ve been a union man for 30+ years.

    And I don’t get it. I’ve studied the IRS definition of what a contractor is, and I can’t see how rideshare drivers are anything but. They supply their own tools and equipment and set their own schedule.

    Second, the only service Uber provides is matching people who need a ride with people who are willing to give someone a ride. Near as I can tell, that’s all they do. Craigslist also matches people with services to offer with people who need those services. Are contractors who advertise there employees of Craigslist?

    Third, what about hotshotters and expediters? They do the same thing Uber drivers do, except with freight. Are they employees of the firms that match drivers with loads? Nope, they are contractors.

    Finally, nobody is compelled to contract with Uber. If you don’t think it’s a viable contracting job, don’t do it.

    • 0 avatar
      Urlik

      Under Department of Labor and IRS rules they are independent contractors. California had to make a state law that ruled them as employees. Other states like New Jersey are trying to do the same. The law was Union sponsored because they need more dues. The unintended consequences have been devastating to lots of subcontractors that couldn’t talk the legislature into exempting their occupations.

    • 0 avatar
      gasser

      They fail the most important test of being a subcontractor… Lyft and Uber set the rates, NOT the subcontractor.

      • 0 avatar
        Urlik

        No such thing as a “most important test” for subcontractor tests. No one of the seven areas are more important than any other. (I enforce this stuff for a living).

      • 0 avatar
        stuki

        As a way forward, software facilitating individual drivers greater discretion wrt specifying their rates, with Lyft simply picking the lowest bidder, is a step up from the current way of doing it.

        Better yet, though not for Lyft the aggregator, if that software is completely decentralized, such that all reputation etc., accrues to individual drivers, or perhaps (dynamically) voluntarily entered into drivers’ collectives, rather than a giant borg serving to diffuse accountability and invariably seeking to extract rent.

        Facilitating pure matching of hailers and fully independent, decentralized pirate cabs, is the optimal setup and ultimate goal. Leavig no “in” for the leeches to hook their extractive, value destroying claws into in order to insert themselves into value chains they are way too dub and incompetent to contribute anything at all to. Doubly so in ambulancechasertopias, where no business model requiring any deep pocketed actor, can ever be efficiently operated.

  • avatar
    Vulpine

    That kind of suggests the courts were right about how Uber and Lyft were treating their drivers. I understood it from the beginning, which is why I never hired an Uber or Lyft for transportation. I’d contract a licensed taxi service instead.

    • 0 avatar
      ScarecrowRepair

      @Vulpine:
      It is none of your business or the government’s business how two consenting adults agree to a trade, as long as it’s voluntary and no one else gets hurt. Neither side is losing anything if they both voluntarily agree to the deal. Even if, at worst, one party discovers he misunderstood the deal, they are not held by any long term bondage; they can drop out.

      You understood nothing about the arrangement, not from the beginning and not now, if you think your perception of it is better than the thousands of drivers who continue to happily remain in the deal they voluntarily chose.

      Or do you really think you know more than they do, about what works for them?

      • 0 avatar
        notapreppie

        But it’s not two consenting adults.

        It’s one adult getting snow-jobbed by corporations with 5,000+ (Lyft) and 26,000+ (Uber) employees. Who do you think has the power here? Treating drivers as contractors is just another means to dehumanize them and do an end-run around worker protections.

        This notion that a corporation is a person needs to die in the fires of Mount Doom.

        • 0 avatar
          FreedMike

          “This notion that a corporation is a person needs to die in the fires of Mount Doom.”

          Couldn’t agree more. Large corporations are, for all intents and purposes, super-citizens when it comes to politics. They have the same free speech rights as you and I, just with a multi-million dollar ad and payola budget. Same is true of special interest groups. This stupid state of affairs came to be because they successfully argued to the Supreme Court that they were “people” (the Citizens United case, which for my money is right up there with stuff like Plessy v Ferguson and Dred Scott as one of the worst decisions in American history).

          But then when corporations screw up and cause widespread harm, or accidentally kill people, they hide behind the “we can’t be sent to jail because we’re not really individuals” nonsense.

          Excellent case in point: a few years back, here in Colorado, a farming company decided to start washing its’ cantaloupes with equipment designed for potatoes because the right equipment was expensive. Not surprisingly, this ended really, really badly – 33 people **DIED** of food poisoning. Now, if I screwed up and negligently caused the death of 33 people, I’d end up in jail, and rightly so. Did these guys? No. They walked.

          Did BP do time for the Gulf of Mexico oil spill? No. Did Alaska Airlines do time for maintaining its planes so poorly that one literally fell out of the sky and killed 180 people? No. Did GM do time over the Cobalt ignition switch debacle that killed Lord knows how many people? No.

          And yet, each of these corporations is allowed to spend almost unlimited sums of money to pollute the political system that would actually hold them accountable.

          Absolutely OUTRAGEOUS double standard.

          • 0 avatar
            SCE to AUX

            @FreedMike: I agree with you, but it can’t be both ways in the other direction, either.

            You can’t prohibit corporations from political involvement as ‘people’, yet prosecute them as people for negligence as in the cases you cited.

          • 0 avatar
            FreedMike

            Two potential answers:

            1) Redefine “free speech” to mean the same thing for ABC Corporation (or insert the name of your least favorite multi-billionaire political donor or interest group here) as it does for you or I – they can just say “I favor candidate A because of A, B and C. This message was brought to you by ABC Corporation.” If they want to run ads for candidates, fine – limit the amount of money they can spend, and make them identify themselves as the endorsers. As long as the voters know who’s running the ad, they can make up their own minds. But that’s not what’s happening – these donors are essentially funneling the ad money to the candidates themselves. It gives the donor direct control over the candidate once the election’s over. This isn’t free speech – it’s basically legalized bribery, and it needs to end…yesterday.

            2) You can’t send companies to jail, but you sure as hell can send people who work for them to jail. Make it like the military – if a Navy ship goes aground, the captain takes the blame, even if he was in his quarters asleep when it happened. BP, did you screw up and kill 11 people and pollute the entire Gulf Coast? Fine. That means the captain of your ship – the CEO – goes to jail. And you get fined out the wazoo. That should make companies quite a bit more cognizant of their wrongdoing.

            Same approach could be taken with illegal immigration, when you think about it – did your company hire 100 illegals? Fine. Your CEO goes to jail. And you get fined.

            The reason all this DOESN’T happen has to do with the first thing I was talking about – legalized bribery. Companies PAY elected officials to make sure that nothing I’m talking about happens.

      • 0 avatar
        jkross22

        Scarecrow, Your consenting adults argument also can be applied to prostitution and drug dealers. 2 adults entering into an arrangement. Forgetting the moral issues with both, they meet your criteria.

        I’ll avoid the consenting adults argument where hundreds of people gather with no masks during a pandemic and leave it to you to determine if that’s in the bucket of ‘life, liberty and the pursuit of happiness’.

        Moral dilemmas abound.

      • 0 avatar
        Vulpine

        @ScarecrowRepair: Are you one of those Uber/Lyft drivers? If not, then how do you know those regulations aren’t valid? How do you know those complaints against Uber/Lyft aren’t valid? And as others have clearly stated, Uber and Lyft are not adults, they’re corporate entities out to make a buck any way they can.

        Regulations and laws are created for a reason and no, taxes are NOT that reason.

  • avatar

    Vote for Democrats and you will live happily ever after.

    • 0 avatar
      Old_WRX

      Live happily ever after or at least for the rest of your life — however short that may be.
      But, would they really be stopped in their nefarious schemes even if the dems don’t get in? Somehow I doubt it.

  • avatar
    Imagefont

    I have a friend who drove for Yellow Cab in San Antonio, TX for 20 years. He was an independent contractor and as such had no insurance. He paid a fixed franchise fee for the cab, which included a mandatory maintenance contract. He basically had to drive so many days in order to break even on the franchise fee, then everything after that went into his pocket. He kept 100% of the fares he collected. What you find is that successful cab drivers drive 10-12 hours a day, 7 days a week and a rare day off. That’s the only way they can make money. I’ll bet the Uber and Lyft guys drive and think they’re making money and what they’re really doing is wearing out their cars because they’re not getting paid the 40 cents a mile for their vehicle’s replacement cost. You must be an idiot or just bad at math to drive for these companies, there’s no money in it. I’m the case of my friend, he got shot when a fare tried to rob him. His emergency room bill of over $5000 and without insurance he was on the hook for every cent – Yellow Cab had zero liability. This is not the way it should be.

    • 0 avatar

      No one forces them to drive for Uber. It is their business what they do not fxxing government in Sacramento.

      • 0 avatar
        Imagefont

        I’m not saying the new law is a good idea. But I do think that when you ride in a cab you should pay the full cost of doing so. Lyft wants their drivers to do it part time and have other, REAL jobs that provide benefits and insurance so THEY can avoid that overhead. It’s complete BS. Uber and Lyft are too cheap, getting around a congested city is and should be damn expensive. And if you don’t like paying those high prices, well, no one is forcing you to! You can just move away.

      • 0 avatar
        Art Vandelay

        If they are being paid below minimum wage and in turn go to Uncle Sam for assistance then yeah, it’s my [email protected] musiness. If they are paying them in accordance with applicable wage laws, so be it. It seems.like they weren’t and these new laws are likely just employment law catching up to the new “gig” economy.

        Again, like companies that pay more to keep unions out, all Uber/Lyft had to do was throw the driver’s a bone as a sign of goodwill and they’d have backed off most likely.

        Yes, I saw above…they lost money even with the low driver pay so maybe they needed to raise fares or the business model just isn’t sustainable.

  • avatar
    ToolGuy

    My daughter wanted to see New York City last spring – we flew and used mass transit.

    Now my daughter wants to see LA. We are planning to fly and use mass transit (and also mentioned Uber/Lyft as a fallback; no rental car) several months from now. It will be interesting to see what transportation options we gain or lose between now and then.

    • 0 avatar
      R Henry

      @TOOLGUY

      LA metro is not a place where public transport works well for travellers. Compared to other cities, LA is decentralized. “Downtown” is just a few tall buildings, Staples Center, and the convention center. Unlike other huge cities, very few live downtown. Did you know there is no train service to/from LAX?

      As one who has lived in suburban LA since the 80s, take my advice: Rent a car. Make it a Mustang convertible, and be sure to drive north through Malibu on US1, and return to the city via Mulholland Highway.

      • 0 avatar
        ToolGuy

        @R Henry, thank you very much for the recommendation (filed with my travel plans).

        • 0 avatar
          -Nate

          RE: Los Angeles & public transport .

          I live here and because stupid, I occasionally ride the metro or worse, the Ghetto bus .

          There _is_ light rail transport to about three miles from LAX, it dumps you off on Imperial Highway and you have to wait for a bus…..

          I don’t recommend public transport to anyone visiting here, if you mistake and get on the ghetto Blue line we may never see you again .

          Rent the smallest car you can suffer, you’ll be glad you did .

          -Nate

  • avatar
    DenverMike

    Legally, Uber/Lyft drivers are no different than independent truckers. Or Hotshots.

    The only difference is their freight/loads aren’t funneled through 2 major brokers. There’s thousands of those.

    Whether it’s for freight or live humans, the gigs remain the same.

    There’s also independent truckers and Hotshots constantly put out of business by their expenses. Who’s gonna cry for them?

    Except for them, it takes a huge commitment, and not something they can just do when they’re bored, a couple hours a day or per week, with a truck and trailer they would own anyway.

    California can’t just cherrypick which “contractors” or matchmaker/brokers they’re going to target or hate on, and then look the other way for others.

    • 0 avatar
      Daniel J

      Exactly. In many cases the customer sets the rate. With some DOD contracts, the rate is set by the government. Then the contracting company uses or hires contractors willing to work at that rate.

      So this idea the contract sets the rate is the end all be all is ludicrous

    • 0 avatar
      Urlik

      California’s AB5 went after the truckers too, including owner/operators. A federal judge has put it on hold because of DoT’s jurisdiction for trucking at this point.

  • avatar
    Master Baiter

    I have mixed feelings about Uber and Lyft. I’m all for competition, but it seems unfair to allow such companies to skirt the regulations and medallion fees that cab companies have had to deal with in order to operate.

    And I’ve had a few horrible drivers with these services–people just off the boat who drive like they got their license yesterday.

  • avatar
    Don Mynack

    Wait, I though Obama’s insurance exchange meant that businesses didn’t need to offer benefits? Why wouldn’t these drivers qualify for a full subsidy? Oh wait, this isn’t about benefits, its about collecting CA payroll taxes from the drivers.

    • 0 avatar
      FreedMike

      Independent contractors pay state income taxes, just like W2 workers do. I don’t see your point.

      • 0 avatar
        RHD

        They also pay 15.3% Social Security tax, instead of 7.65, with the employer paying the other 7.65%.
        Keeping workers as independent contractors instead of employees saves the employer the worker’s compensation insurance costs as well. They also do not pay into the unemployment insurance account.

  • avatar
    FreedMike

    I get the objections to this, but what we’re seeing here is a side-effect of the “gig economy” – most people who work a job (or, more likely two or three) like this full time have *zero* protections against illness, disability, and so forth. If they get sick, or hurt on the job, they’re boned. That’s not fair.

    Yes, these arrangements are independent-contractor in nature, but they’re also gamed to cater to low-income, low-skill people who don’t have any real alternatives. Uber and Lyft know who their “contractors” are, and have set up a business model that isn’t all that fair to their contractors, and “well if you don’t like it, then leave” doesn’t cut it – unfair is unfair, period.

    Looking a bit deeper, this is just another symptom of our zero-safety-net society, folks. If you want to fix this, then the answer is simple: make it a national priority to take care of workers.

    • 0 avatar
      SCE to AUX

      “make it a national priority to take care of workers”

      That’s what labor laws are for, and what CA is trying to do. But it also smells very protectionist of a different class of workers – the taxi drivers.

      CA is reaping the reward of ‘protecting’ the Lyft workers: now they won’t have any. In the liberal CA legislator’s mind, a few well-paid highly protected workers is better than many workers earning income form jobs they chose to do.

      The UAW has the same mentality. It doesn’t really care about job losses; it only tries to keep the party going for the dwindling number of workers it has.

      The minimum wage story is the same thing. Keep raising the minimum wage, and you’ll find fewer workers in those fields because a) employers can’t afford it, and b) employers will become *very* picky about who they hire.

      So CA’s move here will actually reduce the standard of living for its former Lyft drivers who can no longer do that work. So much for protecting them.

      • 0 avatar
        FreedMike

        Labor laws are a good start and do guard against things like obvious abusive or unsafe practices, but what I’m talking about is more along the lines of safety nets.

        A century ago, when these laws were written, the world was a very different place, though – there was a “if you get sick, or you can’t work, tough s**t” mentality that just doesn’t fit with how our society works anymore.

        • 0 avatar
          Imagefont

          Well if you get sick and can’t drive for Uber and Lyft anymore, and you don’t have any medical insurance, aren’t you just supposed to die politely before running up a big emergency room bill? After all, there’s probably some other expendable human being waiting around to take your place so no big deal.

  • avatar
    jkross22

    There’s a business opportunity here. An enterprising business leader can start a ride sharing business where they’re paid a referral fee – let’s call it 25% – of the ride’s total cost, while the driver takes the rest.

    Makes me wonder why that has not yet cropped up.

    With so many people saying Uber and Lyft should be shut down, I wonder what percentage of those people would be willing to pay more for a ride sharing service where the drivers earned more.

    • 0 avatar
      SCE to AUX

      “I wonder what percentage of those people would be willing to pay more for a ride sharing service where the drivers earned more”

      Almost none.

      This is why people don’t shop for American-made shoes, clothes, electronics, tools, cars, disposable products, or services anymore. They just want the lowest price for the quality they’re buying.

      A few bloggers start with the phrase “I’d pay more for (product XYZ) if it was American-made…”, but few people put their money where their mouth is.

      Most Lyft/Uber rides are brief encounters that end well. Paying more for the same outcome seems unlikely.

    • 0 avatar
      DenverMike

      What’s going to happen is ride-sharing will pop up on the “load boards” that trucker/Hotshots use. Then there will be nothing stopping former Uber/Lyft drivers from getting a crew cab and hauling passengers with a side of freight.

      Once the Genie is out of the bottle…

  • avatar
    DenverMike

    Can we stop calling them “victims”? Those all worked for HDC.

    Where else are you free set your own hours, days, what you drive, how you drive, etc, (up to a point)?

    There’s plenty of conventional driving jobs everywhere. EVERYWHERE! In fact it harder to not find one. But if you’re great spending less per miles driven, it can be a way better opportunity and or experience than a normal job-job driving.

    Freedom is the key word here.

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