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.
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.
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.
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.
Uh, Uber drivers are also engaged to wait. And it’s not like the hospital is specifically paying people to wait - they’re paying people to be available to provide a certain consistent level of service.
I don’t know why you’re getting downvoted, you’re not wrong. Do I think the gig economy is ultimately a profitable enterprise for rideshare drivers? I do not, and I think the business model is problematic at best. However much of what I have seen is that the drivers want it this way. So ok.