Want to read Slashdot from your mobile device? Point it at m.slashdot.org and keep reading!

 



Forgot your password?
typodupeerror
×
Businesses

Uber CEO Says Its Service Will Probably Shut Down Temporarily in California if It's Forced To Classify Drivers as Employees (cnbc.com) 476

Uber would likely shut down temporarily for several months if a court does not overturn a recent ruling requiring it to classify its drivers as full-time employees, CEO Dara Khosrowshahi said in an interview. From a report: "If the court doesn't reconsider, then in California, it's hard to believe we'll be able to switch our model to full-time employment quickly," Khosrowshahi said. Uber and rival Lyft both have about a week left to appeal a preliminary injunction granted by a California judge on Monday that will prohibit the companies from continuing to classify their drivers as independent workers. Following the order will require Uber and Lyft to provide benefits and unemployment insurance for workers.

California's attorney general and three city attorneys brought the lawsuit against the companies under the state's new law, Assembly Bill 5, that aims to provide benefits to gig workers core to a company's business by classifying them as employees. In his decision granting the preliminary injunction, the judge rejected the notion that drivers should be considered outside the course of the companies' businesses, calling the logic "a classic example of circular reasoning."

This discussion has been archived. No new comments can be posted.

Uber CEO Says Its Service Will Probably Shut Down Temporarily in California if It's Forced To Classify Drivers as Employees

Comments Filter:
  • Oh noes! (Score:4, Informative)

    by Anonymous Coward on Wednesday August 12, 2020 @12:12PM (#60393795)

    How else will the suckers find a way to drive around all day and wear out their car to earn $4 an hour?

    • How else will the suckers find a way to drive around all day and wear out their car to earn $4 an hour?

      Damn, Somebody makes $4/hour driving for Uber? No way..

      I ran the numbers once and there was no way to make this pay. Sure, there was a lot of cash flow, just very little profit. If you figured in maintenance and depreciation of the car you are driving, I don't know how anybody could clear $4/hour in the long run driving part time. The only possible way to make this pay was to drive the cheapest car possible, only during peak pricing and only in specific areas. The problem is, there are too few of thes

  • Uber has seen this coming from years since the Dynamex case..
  • Inefficient (Score:5, Insightful)

    by fermion ( 181285 ) on Wednesday August 12, 2020 @12:43PM (#60393955) Homepage Journal
    The way I read the earning is before the current crisis, Uber made 18 billion. On paper they lost 1 billion, a quarter of that was due to overcompensation of executives. They earned a Over billion dollar profits overall and have 11 billion in cash..

    The disruption of the tech industry has mostly been to strip low level employees of compensation and benefits to overcompensate executives. This goes back to MS misclassifying workers as contract, the crying and threatening to move to Canada if they had to follow the laws of the US. Uber is doing the same thing threatening to shut down in California, sending a message to the rest of the world. That they would rather put all their workers, who they have a responsibility to, out of work rather than follow the law.

    Uber does impose certain restrictions, such as the type of car, and the number of rides one is allowed to disregard, that makes the contract worker more like employees. They certainly have to rework the guidelines for workers, for instance deny certain drivers who do not earn enough, but that is not unreasonable. We will simply be moving to a more professional and reliable workforce, which I think will benefit us all

  • by smooth wombat ( 796938 ) on Wednesday August 12, 2020 @12:46PM (#60393977) Journal

    From the very beginning we've been told the Uber Cab Company was not a full-time job, but a way for people to gain a little extra cash on the side by offering up their vehicles as cabs once in a while.

    You know, that if the person just happened to be going to the local airport at 5 AM for some unknown reason, and someone else was going the same way, they could pick up this passenger for a fee. And by fee that means far above and beyond the cost of gas used to drive to said airport.

    Then, on their way back from the airport they went to for some unknown reason at 5 AM, someone else was going to the same grocery store the driver was going to, once again a fee would be imposed far and above the cost of the gas used to get to said store.

    Yet now we're being told people are driving their vehicles as cabs full-time but aren't allowed to get the benefits of a full-time worker? Something tells me Uber may not be telling the truth.

    • by crow ( 16139 ) on Wednesday August 12, 2020 @01:01PM (#60394081) Homepage Journal

      Yes, that's how it was portrayed when they started, but very quickly they found most of their drivers were full-time. They also engaged in various programs to do things like help drivers to buy cars, which was clearly targeted at full-time drivers.

      Now if Uber limited contractors to 20 hours a week, then you can bet all those drivers would spend another 20 hours with Lyft, and another 20 hours with some new competitor. That's the problem with forcing people into part-time jobs to avoid paying benefits.

      Of course, 90% of this boils down to the problem of tying health care to employment. That's by far the largest benefit issue at stake here. Paid time off is just a drop in the bucket in comparison.

      • Of course, 90% of this boils down to the problem of tying health care to employment.

        Exactly. Can you imagine if car insurance and oil changes was tied to your employer? Our healthcare in America is so ridiculous.

        • by whoda ( 569082 )

          Car insurance can be tied to what you do for a living. Go tell your insurance company you are really using your car to Uber/Lyft/Postmates/Doordash/etc, honestly quote your mileage, and watch your rates go up dramatically..

          • by crow ( 16139 )

            I thought regular car insurance didn't cover you while driving for Uber. If you have the app on, you're a commercial driver, which leaves a nasty gap, as Uber's insurance only covers you when you have a passenger. Or at least that was the case a couple of years ago when I looked into it.

      • Of course, 90% of this boils down to the problem of tying health care to employment.

        I never understood why people saw health insurance provided by their employer as "free". Your employer doesn't see the cost to employ you as just your wages. They see it as the sum total of your wages + benefits + insurance + payroll taxes + logistics (office space, computer, HR time for interviews, etc). They have a maximum limit in mind for how much they're willing to pay to hire someone. If you insist on sticking heal

        • by crow ( 16139 ) on Wednesday August 12, 2020 @04:10PM (#60394869) Homepage Journal

          Employer-provided health insurance is still generally cheaper than buying the same level of coverage as an individual, even when you factor in the employers' portion. Companies have professionals who know the system and can get the best deal, especially if they're negotiating for hundreds or even thousands of people.

          The paid time off being really about being able to take vacations without losing your job is mathematically valid, but if we didn't structure it that way, people wouldn't take vacations, and that wouldn't be good.

          Another thing with benefits is that they don't count towards the minimum wage, so at the low end, any mandated benefits can be viewed as a minimum wage increase, though usually they instead result in converting full-time jobs into multiple part-time jobs. That's why I've argued that if we have mandated full-time benefits, employers should also be required to pay a pro-rated equivalent for part-time jobs, so that they can't bypass the benefits portion. At the low-end of the economy, we have tons of people with multiple part-time jobs and no benefits, which is just wrong.

    • It's worse than that. Last time I was at PepBoys to pick up some parts, there was a waiting area in the store they had dedicated for people renting vehicles specifically to drive for Uber and Lyft. This was distinctly different than renting a vehicle while yours was in for repair. There's a larger predatory economy forming around contract drivers beyond just how Uber and Lyft driver/employer relationship.

  • by magzteel ( 5013587 ) on Wednesday August 12, 2020 @12:46PM (#60393981)

    To me it just reads like "Our slaves want to be slaves. If we can't have slaves were shutting down the plantation".

    Sure, we all like getting our cheap cotton. And maybe it will be rough on the slaves at first.
    But that doesn't justify allowing it to continue and expand.

    The plantation owners will just have to figure out how to continue making cotton profitably while at the same time compensating their labor force appropriately under the law.

  • by 0101000001001010 ( 466440 ) on Wednesday August 12, 2020 @01:56PM (#60394357)

    That's the beauty of capitalism. If Uber cannot make a profit while complying with the law in California, I am confident another startup will be happy to take its place. Uber will be happy not to be forced to operate under the rules of meany Californians, another set of venture capitalist will make a ton of money, consumers will have choice, and drivers will be recognized as employees.

    Everybody wins, right Mr. Khosrowshahi?

  • by stevez67 ( 2374822 ) on Wednesday August 12, 2020 @02:36PM (#60394499)

    After watching the "gig economy" for a few years I've come to the conclusion that it is just a pretty name slapped on traditional business models so they can pretend they're something new and inventive, under-pay employees, offer no benefits, scrape all the profits to the investors, and walk away when someone notices that they're a traditional business using semantics to try to avoid labor laws and legal responsibilities.

  • Wait until cities realize that Uber and Lyft aren't novel concepts, they're just livery taxis that think taxi regulations don't apply to them.

"When the going gets tough, the tough get empirical." -- Jon Carroll

Working...