Most Read
Image 01 Image 02 Image 03

Everyone panic, California is about to destroy Uber

Everyone panic, California is about to destroy Uber

The end of the “sharing economy?”

Real talk: Uber is a fantastic service.

Living in Washington, D.C., I’ve come to appreciate the availability of drivers who know the city well enough to not get me stuck in a quagmire when I’m making a quick trip across town. It’s a rare thing, and 9 times out of 10, a true D.C. cabbie will do the job (at 50 miles an hour through Chinatown in the bike lane, but who’s complaining?)—but what if there’s no cabbie in sight?

Call an Uber, silly.

The Uber ride share service has taken America by storm, and for good reason; the unmitigated hassle of calling a cab company, finding an available car, and arranging a ride has been re-privatized using a single app and a network of drivers who are itching to take you where you need to go. It’s usually cheaper than a cab (at least in my experience) and less dicey with regards to routes and payment. Everything is handled through the app, and if your driver takes you home via Timbuktu, you can complain and earn yourself a refund. (Try complaining to a cabbie—you’re likely to get the cops called.)

It’s easy! It’s wonderful! It’s under fire from California bureaucrats!

Of course.

In a ruling filed today, the California Labor Commission held that a San Francisco-based Uber driver is an employee, and not a contractor, as Uber has argued multiple times, before multiple commissions and courts. Saying that Uber is “involved in every aspect of the operation” of its ride hail operation, the Commission awarded Barbara Ann Berwick $4000 in expenses.

Uber is appealing, but what does this ruling mean for the booming “sharing economy?”

Ride-hailing apps like Uber and Lyft (which is also fighting the “employee or contractor” battle in various courts), alcohol delivery services like Klink, and personal assistant operations like Favor have been spoiling patrons for a while now, and the appeal of these services is one of pure convenience, coupled with a budding desire for choice in how we handle everything from travel to mundane tasks like grocery shopping.

Progressive government bureaucracies hate choice, but they love control—especially when it means complicating things for entrepreneurs trying to think outside the box.

Medium explains why this ruling could turn into such a disaster for Uber and other share-focused companies:

While the CA Labor Commission’s ruling only affects Uber (and a single driver) at this point, a broader move to classify these types of platforms as employers would have serious consequences for the continued success of current sharing economy firms. It could also put an end to the type of innovation and entrepreneurship that has been a hallmark of the sharing economy, and the way it is shaping how individuals connect and exchange with one another.

For Uber, as well as other sharing economy firms, designating drivers as employees rather than contractors would involve enormous costs. These firms would be on the hook for items such as overtime pay, unemployment insurance, workers’ compensation for job-related injuries, Social Security benefits, and family leave. Uber, Lyft, and Sidecar could also be forced to reimburse drivers for operating expenses, which could include ordinary maintenance, repairs, as well as the cost of fuel, tolls, and other costs related to driving.

Governing bodies trend against what they don’t understand. Maybe that’s why this sounds like a great scheme : raise the costs of operation, take drivers off the road, increase prices for customers, and create the sort of false scarcity that could eventually tank what was once a great service.

DONATE

Donations tax deductible
to the full extent allowed by law.

Tags:

Comments

One obvious partial solution would be for Uber to change its business model and contract with drivers who have set up an LLC, for which they’d be the only employee. As an employee of the LLC, there’s no way for the driver to be considered an employee of Uber.

    ss396 in reply to Jimbino. | June 18, 2015 at 9:35 am

    And then the drivers in their LLC will have to do business income taxes along with their personal income taxes, plus all the filings and remittances and reports required by the local municipality / county for operating a business there. It’s a solution, but it comes with its own set of hassles, too.

California.
Of course.

MouseTheLuckyDog | June 17, 2015 at 5:11 pm

Hmmm
As I understand for any states Labor Commission ( or equivalent ) to get involved, the contractor/employer has to complain.

Someone who knew what was involved upfront. Seems like a sleezty character.

    Said scumbag is apparently named “Barbara Ann Berwick” and she thinks they owe her $4,000 in expenses. I’m guessing this is one of those cases where “loser pays” tort reform is in order.

California: the race continues – will they reach bankruptcy first, or crumble into the sea?

Of course it’s under fire.
Sounds like a nightmare to tax and regulate.
SO of course they would hate it.
Government, particularly Kalifornia Government, want to run every steenkeen aspect of your life.

Welfare, entitlement, and the “social safety net” generally, must be funded.

That said, with over $18 trillion in debt and counting, why do they have to be funded? It seems that in our liberal age, debt and wealth are fungible.

The worship of the Gods of Net 2,0 continues apace in it’s Libertarian guise. In extreme libertarianism aligned with the Gods of the Net 2.0 we have Bruces, Ellens, Obamas, Google-Facebook-good/NASA-bad, We have UBER. There is no judgement, there are no laws except power. SOCIAL power. The fuel of politics.

Yes, DC LOVES Uber. the very SEAT of the ADMINISTRATIVE STATE is Uber’s most lucrative market (at least I’d so guess based on personal observations). Are workplace rules, or taxi medallions, or livery licenses, or special livery insurance for Uber. No. Uber is uber the law.

Know I don’t like the law today either. I hate the administrative state, state licensing in trades and professions, the arrogance of the elite in be-pensioned lifetime sinecures where they craft burdens and inscrutable Kafka-nightmare codexes that are enforced upon the weak.

But I see that SF Big Capital Big Venture Das Kapital (SFBCBVDK) is an uber fish that voraciously swallows all dem unter-fischen. Including erasing all the little legislative districts (we call them municipalities) that most closely approach democracy and seek in cities to protect the small from the large.

Over at Zero Hedge a correspondent (Daniel Drew of Dark Bid) writes “Uber is just one example of the exploitation business model. From Washio to Airbnb, companies in the so called “sharing economy” seek to avoid licensing, regulation, insurance, standard labor costs, and basic business responsibility. This trend threatens the average worker and fosters the development of a peasant class.”

Gosh, if I had a few billion dollars (US, not Zimbabwe) I’d stake out some legal teams on BOTH sides of the issue. If only, if only two great beasts would fight each other to death.

What protects Uber? IP law? Not sure, THAT would be interesting to learn. A two minute google ™ (by the way who has the IP ownership of the Hebrew word google is derived from?) suggests that they may not be enforcing some claim of business process patent, just running on performance and packaging. That would be cool.

WHAAA???

That is one of the most confused rants I have ever read. In essence: “I am opposed to the administrative state but because Uber is attempting to circumvent the administrative state, I hate Uber?”

I guess it really is possible for someone to believe that “A = non-A”.

    DaveGinOly in reply to David Jay. | June 17, 2015 at 11:06 pm

    It’s called “cognitive dissonance.” It is a common affliction among liberals, but not unknown among those who populate other frequencies of the political spectrum.

      It’s called life. Real life is full of cognitive dissonance. Read rather than skim and experience less dissonance. in life too.

    Estragon in reply to David Jay. | June 18, 2015 at 2:56 am

    Zero Hedge features some great, hard-to-find information, intelligent takes, and a good sprinkling of psycho conspiracy theories. You need to be able to tell flowers from weeds over there or you will find yourself in deep, fast.

    bvw in reply to David Jay. | June 18, 2015 at 8:07 am

    “one of the most confused rants that I have ever read” … hyperbolic hysterics rarely aid intellectual comprehension.

      Ragspierre in reply to bvw. | June 18, 2015 at 8:18 am

      But “Brevity is the soul of wit”. Of which, you ain’t got.

      Market economic theory and practice are BOTH very simple, and you kinda understand them and practice them or you don’t.

      Oh, and the circumlocution office went out with Dickens. They aren’t hiring…

        I have brevity and wit enough to chance an unpopular stance.

        Uber amoung the Uber-Lords of DC. The Marie Antoinettes of out time love having both cake and bread, since they is first in line for every bene, and exempted from every liability for avery misfeasance and maliciousness their regulations cause the rest of us.

        IS their a negative to Uber? Yes. There is, and I’m only suggesting it. Uber will be a bully — their user distain for municipal laws regarding livery and medallions shows that. I understand we people love them for that disdain, because even towns and cities make bed law. By why doesn’t the group-think of DV hate them? Like likes like. You all, all you all, are missing something in the middle of the room because it’s so big.

        I hate bullies. You like bullies. Maybe, I’m saying if you like Uber, you may like DC, (acknowledging the gorupthink is not stereotype) like DC likes Uber for the reasons they do not dislike Uber. Like likes like.

        I will repeat myself, for I am manifold.

        Ihave brevity and wit enough to chance an unpopular stance.

        Uber amoung the Uber-Lords of DC. The Marie Antoinettes of out time love having both cake and bread, since they is first in line for every bene, and exempted from every liability for avery misfeasance and maliciousness their regulations cause the rest of us.

        IS there a negative to Uber? Yes. There is, and I’m only suggesting it. Uber will be a bully — their utter distain for municipal laws regarding livery and medallions shows that. I understand we freedom-loving people love them for that disdain, because even towns and cities make bad law. But why doesn’t the group-think of DC hate them? Like likes like. You all, all you all, are missing something in the middle of the room because it’s so big.

        I hate bullies. You like bullies. Maybe, I’m saying if you like Uber, you may like DC, (acknowledging the groupthink is not stereotype) like DC likes Uber for the reasons they do not dislike Uber. Like likes like.

        DC the bully heart of it, loves Uber’s carelessness in exercise of their social media-fueld and SF venture fund and milieu-fueled power. The Lords of Web 2.0, those who become billionaire in under a few years, wield a considerable amount of careless and reckless power.

        The kind of Prairie Fire power it took Bill Ayers, Obama, et al, decades and decades to wield effectively.

        It’s NOT an economically healthy power either way.

        Ragspierre in reply to Ragspierre. | June 18, 2015 at 12:05 pm

        “Uber is just one example of the exploitation business model. From Washio to Airbnb, companies in the so called “sharing economy” seek to avoid licensing, regulation, insurance, standard labor costs, and basic business responsibility. This trend threatens the average worker and fosters the development of a peasant class.”

        You know who writes like that? Collectivists. They HATE markets, and the ability of people to participate in them.

        You’re giving yourself the squirts because you ASSume Uber will be a “bully”. I fail to see how. One drives for Uber or one doesn’t. One makes money in a vast sea of unemployment, or one takes the dole.

        One CALLS Uber, or one doesn’t. If one LIKES the “basic business responsibility” (!!!) of the higher-cost regular (regulated monopoly) cab company, one can pay the freight.

        You asked what will protect Uber? UNLESS they change their business model, just their market position. That’s it.

        You’re loopy, dude.

          Ad hominem.

          Resort to attack the messenger. Name calling. Low-life attacks.

          That may be collectivistitis. Intellect inflammation. Is any government level collectivist? Is local government “collectivist”?

          Ragspierre in reply to Ragspierre. | June 18, 2015 at 1:16 pm

          You poor boob. I didn’t JUST say you were loopy. I showed WHY you are loopy.

          It isn’t “name calling” when you show HOW and WHY the terms apply.

          I notice you cannot deal with the observations/arguments.

          Poor, pretentious, loopy thang…

          You are unwise to double down on casual slandering of a fellow human being. A bad habit.

          Ragspierre in reply to Ragspierre. | June 18, 2015 at 1:31 pm

          Slander, you stupid liar, is a false statement made with knowledge of its falsity or carelessness as to its falsity.

          You are the one resorting to ad homimen, and you’re out of your depth.

          You should just stop digging, loopy.

          Tripling down on ad hominem. Slander is simple, your’s has become casual and common, the definition is simple “speak ill/evil of”. Slander is an appeal to emotion, not rationality.

It is quite telling that the DC loves Uber. It is quite telling that those who LOVE OVER REGULATION enough to stake their household wealth and their work life on it love Uber.

It is NOT a sign of emancipation.

    Ragspierre in reply to bvw. | June 18, 2015 at 8:25 am

    Wow. How stereotypic of you. YOU told us “DC loves Uber”. And YOU tell us DC is (apparently) populated entirely of BIG GOVERNMENT types. YOU suggest there is a dichotomy here.

    But DC also seems to love food trucks. That is the CONSUMERS in DC love them. Like Uber. And like Uber, the incumbent producers (just as Adam Smith predicted) would like the food trucks shut down.

    Here’s a funny thing…I bet people shop for groceries in DC, too. Markets provide innovations, and choice.

    Don’t be skeered…

Empress Trudy | June 18, 2015 at 10:05 am

I’m not convinced California wants to destroy Uber though it’s certainly possible that taxis and limos have paid them to try. I think though it’s a case of progressives being progressives naturally. Whatever they see must be micro micro managed taxed regulated and licensed because that’s how progressives view the entirety of human existence. People can’t be trusted with even the dribs of freedom The State permits them.

Your BSD 1%er MBA CEO Managers demand you perform unpaid value creating labor, or else they’ll ship your jobs overseas and you & your family will starve.

    Ragspierre in reply to Chem_Geek. | June 18, 2015 at 7:55 pm

    Yes, their carcasses would litter our streets but for the efficient process we have of scooping them up and burning them for fuel to power our BSD MBA office suites.

    You don’t really get what an idiot you are, huh?

nordic_prince | June 19, 2015 at 9:34 am

What exactly is the rationale for exempting Uber and its drivers from arcane regulations like medallions, bonding & insurance, safety checks, etc that regular cabs and cabbies are subject to? How about a level playing field for all transport for hire?

    In an economy driven by cronyism in law, politics, administration, and justice — there is little justice, for the big and powerful get their way just for being big, rude and powerful. Uber says a LOT in it’s name. It wants to avoid all the *burdens* of local governance by being BIGGER than they are.

      bvw in reply to bvw. | June 20, 2015 at 10:13 am

      Not just the economy, the whole of society has taken a HARD turn to cronyism. Including social media sites. Like say, LI. Okay, it may just be temporary cliques, but once a clique and clique (aka crony) philosophy and heart takes over the inner sanctums it is hard to remove before serious damage is done.

That ruling is not going hold. Cab companies where I live treat drivers as contractors, and they work shifts and use company cars. The Uber situation is much looser and less restrictive.

I don’t use Uber, but it is fun to watch and listen to media lefties go insane over Uber.

One thing to keep in mind when travelling — DC is the ONLY place I’ve been where Uber is cheaper than cabs, but that is because DC cabs suck SOOOOO much. DC is easily the worst cab town in the country — and I’ve taken cabs in New Orleans. The cabs are filthy, the drivers are filthy, they don’t know the town, they don’t know how to drive, AND they are more expensive than Uber.

On the other hand, Uber doesn’t tend to be THAT much more than cabs in other towns. If it is a good cab town (like NYC) AND the cab is right there, I’ll take the cab. Otherwise, I’ll usually call Uber.

Font Resize
Contrast Mode
Send this to a friend