Uber says it will not reclassify drivers as employees in California

[Shawn Knight]

In brief: The California Senate’s landmark approval of Assembly Bill 5, or AB5, earlier this week appeared to be the final nail in the coffin of Uber’s fight to continue to classify drivers as independent contractors rather than standard employees. But anyone that has followed Uber closely over the years likely knew the company wouldn’t give up that easily.

Tom West, Uber’s chief legal officer, argued in a recent statement that Uber is a “technology platform for several different types of digital marketplaces” and that drivers’ work is outside the usual course of Uber’s business.

In other words, because Uber believes drivers are properly classified as independent and “because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility,” the company will not automatically reclassify drivers as employees, even after January 2020 when the bill is expected to become law.

West said his company expects to continue to “respond to claims of misclassification” in court, just as they currently do. In fact, Uber and Lyft have already set aside $60 million to build a campaign committee to support a ballot initiative to fight the matter.

This is a good point by @Uber. Just last week as my wife and I were leaving a bar, I turned to her and asked “are you getting a technology platform for several different types of digital marketplaces or should I?” pic.twitter.com/8IlBL5q1Tm

— Jamison Foser (@jamisonfoser) September 11, 2019

Again, this shouldn’t be surprising for anyone familiar with Uber’s business practices. Vice points to a 2016 paper from researcher Rick Claypool called “Disrupting Democracy: How Uber Deploys Corporate Power to Overwhelm and Undermine Local Government” that documents how Uber “overran or ignored regulations in nine cities around the country and then later changed the laws with its high-powered lobbyists.”

Masthead credit: Uber car by MikeDotta. Uber Eats by FREEDOMPIC.

Permalink to story.

https://www.techspot.com/news/81866-uber-not-reclassify-drivers-employees-california.html

 

[antiproduct]

"Uber and Lyft have already set aside $60 million to build a campaign committee to support a ballot initiative to fight the matter."

Just imagine if they put that money into paying their "employees" better instead.

 

[Hexic]

I have to agree with Uber & Lyft.

To pick apart that simple-minded twitter post in the middle of this page - when going to McDonald’s, do you say “Are you going to a hamburger joint?” or do you say “Are you going to visit a multinational corporation that’s in the business of owning land?” Because that’s what McDonald’s is - they own land as their objective, not sell burgers.

It’s called diversification, and the flexibility factor is historically one of the top 3 reasons (at least) why people decide to drive. You can’t go into ANY job and expect all benefits all the time - not with the unique CONTRACTOR role that you play with driving here.

The majority of drivers use this for -supplementary- income, not a lifeline. They’re dictating policy for a small minority to a large majority, and disrupting a very useful societal tool... if not for the increased prevention rates of driving drunk.

Wake up CA...

 

[TroyTrellman]

Just the lunatic legislature screwing people over while trying to "help" them. If Uber and Lyft can't make sufficient profit in California, then they will leave. All those driver will then have no extra income from driving.
Of course that is part of the quasi-commie legislature's plan. Eliminate helpful platforms and force everyone to conform and use public transportation.

 

[DelJo63]

It's sad when the only way to make corporate profits is to abuse those that work for you. After the litigation is settled, besides a massive fine, it's entirely possible that Calif could revoke their rights to do business in the state.

Interstate Commerce falls under Federal jurisdiction -- but only when that commerce actually crosses state lines, so unless someone is taking Lift or Uber ride into Las Vegas from LA or Sacramento to Reno (ouch, what fools), Calif will be where this plays out.

Regardless, Calif could STILL revoke their rights to do business in the state.

 

[DelJo63]

Because that’s what McDonald’s is - they own land as their objective, not sell burgers.

humbug! Mc D's sells franchises as there is no annual rate of return on land.

 

[Hexic]

humbug! Mc D's sells franchises as there is no annual rate of return on land.

Considering I worked in corporate operations there and you can google my statement for verification.. that’s incorrect.

They sell franchises, yes. On who’s land? Their land. Their infinitely recurring revenue stream.

They are moving towards an entirely franchised system now, to both fully take advantage of leasing the land to private operators and remove their corporate stores from the direct liabilities (to the corporation itself) and place those liabilities on the independent operators, or franchisees. That’s how it works.

 

[DelJo63]

Without some business enterprise being conducted on the property, there's no return until it gets sold -- in fact the return is negative on undeveloped land due to property taxes. The franchise is the golden goose.

 

[Rock Dirty]

and force everyone to conform and use public transportation.

You don't live here do you?

If you did live here you would understand how crazy what you just said is. This is a AUTOMOBILE STATE. The number of CA cities with just a "good" public transportation system can most likely be counted on less than one hand. The automobile RULES here.

Also, in case you missed it Uber, Lyft, and all the rest of the "Gig Economy" companies are setting fire to BILLIONS of dollars EVERY QUARTER, not due to government regulation (because there has been none up to this point), but rather due to the fact their ENTIRE business model is FULL OF SHEET. Their failure to turn a profit is ON THEM now, and will be going into the future.

If you base your business model on "One day we'll kill off the competition, rule the world, and charge what we want" you are GOING TO FAIL.

 

[TroyTrellman]

It's sad when the only way to make corporate profits is to abuse those that work for you. After the litigation is settled, besides a massive fine, it's entirely possible that Calif could revoke their rights to do business in the state.

Interstate Commerce falls under Federal jurisdiction -- but only when that commerce actually crosses state lines, so unless someone is taking Lift or Uber ride into Las Vegas from LA or Sacramento to Reno (ouch, what fools), Calif will be where this plays out.

Regardless, Calif could STILL revoke their rights to do business in the state.

Which punishes the drivers who like the current system and the customers. Once again, legislators who know NOTHING about running a business make rules that cripple the business. All of them should have to read liberal icon George McGovern's comments about government regulation after he tried to run the Stratford Inn.

 

[rub900]

Just the lunatic legislature screwing people over while trying to "help" them. If Uber and Lyft can't make sufficient profit in California, then they will leave. All those driver will then have no extra income from driving.
Of course that is part of the quasi-commie legislature's plan. Eliminate helpful platforms and force everyone to conform and use public transportation.

Then they need to leave. If they are not paying their employees a living wage. Bye. On a side note. I will never let my wife use this service. Too many stories of rape and kidnapping. They need to be regulated and play by rules or cease to exist.

 

[Hexic]

Without some business enterprise being conducted on the property, there's no return until it gets sold -- in fact the return is negative on undeveloped land due to property taxes. The franchise is the golden goose.

Once more, I heavily encourage you to google “is Mcdonalds in the business of owning land” or any variant of the sort, and literally all of the top articles will explain the concept.

The franchise isn’t the golden goose, the land is. This isn’t a debatable concept... it’s literally a fact.

 

[DelJo63]

Are the drivers independent contractors?? See
https://www.techspot.com/community/topics/1099-independent-contractor-vs-w2-employee.256790/

 

[Plutoisaplanet]

Another way to put it: are Apple app store developers employees of Apple? Apple makes revenue off their services.

 

[bandit8623]

"Uber and Lyft have already set aside $60 million to build a campaign committee to support a ballot initiative to fight the matter."

Just imagine if they put that money into paying their "employees" better instead.

When your entire biz is nation wide I think they would rather keep them not employees.

 

[Impudicus]

"Uber Deploys Corporate Power to Overwhelm and Undermine Local Government" I'm glad companies like Halliburton, Boeing, Lockheed Martin.. and other Industry leaders don't use their wealth and power to influence Government policies. Could you imagine what that could do to the U.S. economy?

 

[DelJo63]

The franchise isn’t the golden goose, the land is. This isn’t a debatable concept... it’s literally a fact.

GeeWee, tell me, what's your opinion??? :sigh:

 

[Hexic]

GeeWee, tell me, what's your opinion??? :sigh:

I’m gonna chalk your responses up to trolling. Happy posting!

 

[DelJo63]

I speak from 20 years of owning an apartment complex. I made many times more than the gross profits from the sale from the rents collected ... do the math
($profit/month x 12 months x 20 years)

 

[Hexic]

I speak from 20 years of owning an apartment complex. I made many times more than the gross profits from the sale from the rents collected ... do the math
($profit/month x 12 months x 20 years)

That pretty awesome. But that’s not how McDonald’s works.

 

[Larsenex]

I agree with Uber.
California is controlled by unions. If it was a choice to comply or move out of state, if I were Uber I would tell CA to F off.
Unions were at one time good for both the worker and the employer and now with time unions are no longer needed. They are instead a cancer destroying this state. The schools are some of the worst in the nation directly as a result of unions.

 

[DelJo63]

That pretty awesome. But that’s not how McDonald’s works.

so I'll cite

How does McDonald's franchise work?
Forty percent of this cost has to be from your own (non-borrowed) funds.

• You'll pay an initial franchise fee of $45,000 directly to McDonald's. ...
  
• You'll pay McDonald's a monthly fee of 4 percent of your sales,
  
• and either a flat base rent or a percentage rent of at least 8.5 percent of your sales.