California Free Press

Off the Top of My Head

California Cracks Down on Uber and Lyft

by John Lawrence

California lawmakers have passed a historic bill - AB5 - which would reclassify Uber and Lyft drivers as employees instead of independent contractors. The bill now sits on the Governor's desk, and he is said he will sign it. This means that, as of January 1, 2020, Uber and Lyft drivers would be employees. Of course, this will cost Uber and Lyft a lot of money. For starters they will have to pay half of its drivers' social security - the employer's part. What a lot of people don't know is that self-employed people have to pay both the employer's and the employee's social security. You can write off most everything else, but you can't write off social security. For someone who has been self-employed for over 40 years, I'm acutely aware of this phenomenon. It's the government's way of discouraging self-employment or entrepreneurialism, something they tout as the hallmark of capitalism and the American way.

Next Uber and Lyft will have to pay workman's comp insurance, sick leave, unemployment and disability insurance. The law states:

It is also the intent of the Legislature in enacting this act to ensure workers who are currently exploited by being misclassified as independent contractors instead of recognized as employees have the basic rights and protections they deserve under the law, including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave.

Uber and Lyft have said that, if the law passes, they will have to limit the flexibility that has been a hallmark of gig work and put drivers on shifts. This will effectively end the current state of affairs in which drivers can work for both Uber and Lyft having both apps on at the same time and accepting a ride from whichever app gives them a ride first and then turning the other app off for the duration of that ride. Imposing shifts on drivers will make it impossible for drivers to set their own schedules.  For instance, I usually drive 3 hours in the morning, take a 4 hour break during which time I go to the YMCA and either swim or work out followed by lunch and then an hour nap. Then I go out on the road for another 3 hours. I do this 5 days a week taking Monday and Tuesday off. Imposing shift work on me will effectively end my driving career.

The act specifically states: "Nothing in this act is intended to diminish the flexibility of employees to work part-time or intermittent schedules or to work for multiple employers." However, we'll see about that. It doesn't penalize companies who take this flexibility away either. Uber and Lyft maintain that 90% of its drivers work part time. In the final analysis Uber and Lyft will get to decide how AB5 affects its drivers. The bill is expected to add 20% to 30% to the ride sharing companies' costs. And both companies are losing money as it is. Uber reported losing a whopping $5.2 billion in the second quarter of this year while Lyft reported losing $644 million. But don't worry. Even though Uber and Lyft are losing money on each ride, they will make it up on volume! And maybe, just maybe, they shouldn't be sinking millions of dollars into perfecting autonomous vehicles and other less worthy adventures.

Taxis are also catching up. Forbes reported:

For almost a decade, ride-hail platforms like Uber and Lyft have cornered a service consumers demand: the ability to book rides through an app. In response, professional taxis have increasingly turned to similar platforms to help bring their industry and customer pool up to speed.

These include apps like MyTaxi, Cabify, and Taxi.EU, plus dozens of worker-run platform cooperatives serving passengers around the nation and world.

Here in the ride-hail revolution's home country, one of the most popular taxi apps is Curb, designed to let users hail licensed cabs and Access-A-Rides, book flat-rate or per-mile rides in advance, and pay for ongoing taxi rides.

So taxis are getting smarter. You can't hail an Uber or a Lyft, but you can hail a cab. You can't phone Uber and Lyft, but you can phone for a cab. Ditto for web based hailing. Have taxis finally surged ahead of Uber and Lyft? Uber and Lyft are competitors, always competing for both drivers and riders. So far Uber is winning, but they've also been around longer.

Let's see if Governor Newsom signs the bill as written or if it gets sent back for more tweaking. It would be nice if full time Uber and Lyft drivers had employee protections. As for me, the main thing I like about being a driver at the present time is the flexibility it affords. It fits in with my retirement lifestyle, brings in some money and gives me something to do so I'm not stuck in my house like a lot of other retirees.

California Labor Bill, Near Passage, Is Blow to Uber and Lyft

from NY Times

Drivers for ride-hailing services demonstrating outside Uber headquarters in San Francisco last month. The protest was organized in support of a bill in the State Legislature that would extend employee status to many gig-economy workers. CreditCreditJustin Sullivan/Getty Images

 

 

 

By Kate Conger and Noam Scheiber

September 9, 2019

SACRAMENTO — A pack of Teamsters fanned out through California’s Capitol building last week, marching into legislators’ offices and pressing them to pass a bill that would force Uber and Lyft to treat their drivers as employees. The measure, Assembly Bill 5, would entitle gig workers to protections like a minimum wage and unemployment benefits. “Yes on A.B. 5! Yes on A.B. 5!” they chorused.

The push was one of several door-knocking campaigns coordinated by labor groups that can now taste success after battling the ride-hailing companies for years.

The bill is intended to codify and extend a 2018 California Supreme Court ruling that put forth a new test for classifying workers.

Under that test, workers are far more likely to be deemed employees if they perform a function central to a company’s business.

Legislators are expected to pass the bill before their session ends this week, presenting the strongest challenge yet to Uber and Lyft’s business model, which relies on a corps of drivers who can be enlisted and deployed essentially as freelancers.

The measure could affect millions of Californians beyond ride-hail drivers, including janitors, nail salon workers and cable-television installers. And it would give momentum to an emerging consensus on the center-left that workers are entitled to a basic level of economic security that many Americans now live without. Several candidates for the Democratic presidential nomination have endorsed the bill, including Bernie Sanders, Elizabeth Warren, Kamala Harris and Pete Buttigieg.

“It’s hugely important because California is the birthplace and the center of app-based work, and because California has traditionally been a bellwether for the country around a lot of different progressive policies,” said Rebecca Smith, an expert on worker misclassification at the National Employment Law Project, which is part of a coalition seeking to enact a similar law in New York.

Banners showing support for Assembly Bill 5, which would expand the ranks of workers considered company employees rather than contractors. In addition to drivers for ride-hailing services, the bill could affect janitors, nail salon workers, cable-television installers and others.CreditRich Pedroncelli/Associated Press

Industry officials have estimated that on-demand companies like Uber and the delivery service DoorDash see their costs rise 20 to 30 percent when they rely on employees rather than contractors, and Uber and Lyft have said in statements to prospective investors that being forced to make drivers employees could significantly affect their financial outlook. Since the prospect of a deal started to fade in late July, the stock prices of both Uber and Lyft have declined about 30 percent.

Analysts said the stock decline was due in part to concerns about A.B. 5, among other worries about the businesses. “Probably the No. 1 question we get from investors right now is about the risks here, qualitatively and quantitatively,” said Lloyd Walmsley, an equity research analyst at Deutsche Bank. “There’s obviously the risk that California is just the beginning, that other states could follow suit.”

Ride-hailing companies contend that A.B. 5 would force them to set rigid schedules, depriving drivers of flexibility, and raise fares to cover the cost of employment benefits. The companies say that about 90 percent of their drivers nationwide do not work a full-time schedule.

But Tyler Sandness, a Lyft driver who is an organizer for a group called Rideshare Drivers United in Los Angeles, said the bill was needed because “things have gone from bad to worse” for drivers. As independent contractors, drivers must cover the costs of vehicle ownership and payroll taxes, and lack much of the safety net afforded to employees, including workers’ compensation and paid sick leave.

That California has come to the brink of fundamentally threatening such marquee companies is the culmination of miscalculations by Uber and Lyft, a strong show of force from organized labor, and legislators’ resistance to the intervention of the new governor, Gavin Newsom.

The ride-hailing companies sought an amendment to the bill that would create a special category for their drivers, between contractor and employee. Mr. Newsom’s office would not comment for this article, but three people familiar with the discussions said the governor gave the companies clear advice: Get labor to bless such an arrangement, or face insurmountable opposition in Sacramento.

Assemblywoman Lorena Gonzalez, the bill’s sponsor, at a ride-hailing pickup location at San Diego International Airport. “I wasn’t looking to sell out workers,” she said of compromise efforts.CreditJohn Francis Peters for The New York Times

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The Gig is Up

by Robert Reich

Tuesday, June 4, 2019

Uber just filed its first quarterly report as a publicly traded company. Although it lost $1bn, investors may still do well because the losses appear to be declining.

Uber drivers, on the other hand, aren’t doing well. According to a recent study, about half of New York’s Uber drivers are supporting families with children, yet 40% depend on Medicaid and another 18% on food stamps.

It’s similar elsewhere in the new American economy. Last week, the New York Times reported that fewer than half of Google workers are full-time employees. Most are temps and contractors receiving a fraction of the wages and benefits of full-time Googlers, with no job security.

Across America, the fastest-growing category of new jobs is gig work – contract, part-time, temp, self-employed and freelance. And a growing number of people work for staffing firms that find them gig jobs.

The standard economic measures – unemployment and income – look better than Americans feel

Estimates vary but it’s safe to say almost a quarter of American workers are now gig workers. Which helps explain why the standard economic measures – unemployment and income – look better than Americans feel.

The jobs problem today isn’t just stagnant wages. It’s also uncertain incomes. A downturn in demand, change in consumer preferences, or a personal injury or sickness, can cause future paychecks to disappear. Yet nearly 80% of Americans live paycheck to paycheck.

According to polls, about a quarter of American workers worry they won’t be earning enough in the future. That’s up from 15% a decade ago. Such fears are fueling working-class grievances in America, and presumably elsewhere around world where steady jobs are vanishing.

Gig work is also erasing 85 years of hard-won labor protections.

At the rate gig work is growing, future generations won’t have a minimum wage, unemployment insurance, worker’s compensation for injuries, employer-provided social security, overtime, family and medical leave, disability insurance, or the right to form unions and collectively bargain.

Why is this happening? Because it’s so profitable for corporations to use gig workers instead of full-time employees.

Gig workers are about 30% cheaper because companies pay them only when they need them, and don’t have to spend on the above-mentioned labor protections.

Increasingly, businesses need only a small pool of “talent” anchored in the enterprise – innovators and strategists responsible for the firm’s competitive strength.

Other workers are becoming fungible, sought only for reliability and low cost. So, in effect, economic risks are shifting to them.

It’s a great deal for companies like Uber and Google. They set workers’ rates, terms, and working conditions, while at the same time treating them like arms-length contractors.

But for many workers it amounts to wage theft.

If America still had a Department of Labor, it would be setting national standards to stop this.

Yet Trump’s Anti-Labor Department is heading in opposite direction. It recently proposed a rule making it easier for big corporations to outsource work to temp and staffing firms, and escape liability if those contracting firms violate the law, such as not paying workers for jobs completed.

On the other hand, California is countering Trump on this, as on other issues.

Last Wednesday, the California assembly passed legislation codifying an important California supreme court decision: in order for companies to treat workers as independent contractors, the workers must be free from company control, doing work that’s not central to the company’s business, and have an independent business in that trade.

(The bill is not yet law. It still has to pass the California Senate and be signed by the governor. And businesses are seeking a long list of exemptions – including ride-share drivers and many of high-tech’s contract workers.)

For example, they need income insurance rather than unemployment insurance. One model: If someone’s monthly income dips below their average monthly income from all jobs over the preceding five years, they automatically receive half the difference for up to a year.

They’ll also need a guaranteed minimum basic income – a subsistence-level cushion against earnings downturns. And universal health insurance and more generous social security, to make up for the unpredictability of work.

All of this should be financed by higher corporate taxes, ideally in proportion to a corporation’s use of gig workers.

Gig work is making capitalism harsher. Unless government defines legitimate gig work more narrowly and provides stronger safety nets for gig workers, gig capitalism cannot endure.

Protesting 'Poverty Wages' and Exploitation, Uber and Lyft Drivers Go on Strike Across the Globe

Published on Wednesday, May 08, 2019

by Common Dreams

"The gig economy is all about exploiting workers by taking away our rights. It has to stop."

by Jake Johnson, staff writer

 

9 Comments

Uber drivers protest the company's fare cuts and in front of the car service's New York offices. (Spencer Platt/Getty Images)

Just days before Uber is set to make its "blockbuster" debut on the public market, ride-hailing drivers with both Uber and Lyft are going on strike across the globe on Wednesday to protest "poverty wages" and virtually non-existent worker protections.

"This is an act of solidarity with drivers across the country, and really across the world, who are suffering with poverty wages."
—Bhairavi Desai, New York Taxi Workers Alliance

 

"We don't want our wages to stay just minimum. We want Uber to answer to us, not to investors," Sonam Lama, an Uber driver and member of the New York Taxi Workers Alliance (NYTWA), said in a statement ahead of Wednesday's strike. "The gig economy is all about exploiting workers by taking away our rights. It has to stop. Uber is the worst actor in the gig economy."

"I'm striking for my kid's future," Lama said. "I have a five-year-old son, and I drive for Uber to support him. But it's becoming harder and harder."

According to the NYTWA, drivers plan to strike in major cities across the United States as well as in Brazil, Australia, Chile, Nigeria, Costa Rica, Nairobi, and other nations.

"This is an act of solidarity with drivers across the country, and really across the world, who are suffering with poverty wages," said NYTWA executive director Bhairavi Desai.

Todd Wolfson, a Rutgers University professor who studies the gig economy, told The Philadelphia Inquirer that Wednesday's action is the largest-ever global work stoppage by ride-hailing drivers.

Support Uber & Lyft drivers as they strike against these multi-billion dollar corporations for fair pay, safer working conditions, & representation! Don’t cross the picket line—DO NOT USE your Uber and Lyft apps this Wednesday, May 8th! #StrongerTogether #WorkUnitesUs #Strike #1u pic.twitter.com/fLyklTeJH4

— SD Building Trades (@SD_BldgTrades) May 6, 2019

The global strike began Wednesday morning and is expected to continue through early Thursday. Drivers urged the public to participate in the strike by refusing to use Uber and Lyft while the action is ongoing.

As the Washington Post reported, authorities in major cities are preparing for significant travel disruptions at airports due to the strike, which will include a rally outside Uber's San Francisco headquarters and demonstrations at regional offices nationwide.

"Our expenses keep going up. Meanwhile, these companies are getting rich," Kevin Raghu, a Lyft driver and NYTWA member, said in a statement. "We are asking for our fair share and for job security."

Ride in solidarity with Lyft/Uber drivers tomorrow, Wednesday 5/8. Turn off your apps. Support striking drivers who are demanding job security and livable incomes! #StrikeUberLyft pic.twitter.com/R3Tk13o1Co

— Working Families Party (@WorkingFamilies) May 8, 2019

Sen. Bernie Sanders (I-Vt.), a 2020 Democratic presidential candidate, expressed solidarity with Uber and Lyft workers in a tweet late Tuesday.

"Uber is a multibillion-dollar company," said Sanders. "Its top five executives made $143 million last year. Their drivers should not be getting pay cuts—they deserve a living wage and decent benefits."

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License

Off the Top of My Head

Why Does Uber Need to Go Public?

by John Lawrence, April 30, 2019

They have a driver's app and a rider's app which are downloadable to your phone at no cost. Every time a rider calls for a ride and gets picked up Uber collects roughly half the money. This is all done by credit card. It costs Uber basically nothing. It's not like they have to hire a cashier. It's all automated. So aren't the apps in and of themselves money making machines that need no maintenance and hardly any human intervention? So why do they need an infusion of cash by going public? Is it that the owners want to be converted instantly from millionaires to billionaires? That's part of the story.

The other part of the story is that Uber has been losing money every since it went into business. You might ask how is that possible? All they have to do is sit back and collect tolls, and they don't even need to pay the person in the toll booth. Just like the person who makes an incredible amount of annual income, but spends even more than he makes, thereby losing money, Uber has been spending more than it makes profligately burning through cash on such money losing projects as self driving cars, scooter and bike rentals and food delivery. Not content to sit back and collect tolls, they want to take over even more businesses. They want to expaaaaand. It's the competitive American horror story that we live in. It's like Satchel Paige saying, "Don't look back. Somebody might be gaining on you." Who that someone is in Uber's case - is Lyft. Uber and Lyft are competitors. So Uber has to be always growing, always expanding because Lyft might gain an edge on them.

This keeps prices down for riders and increases the payouts to drivers. Just the other day Uber gave me, an Uber driver, $100. They didn't say what it was for, but, after googling around, I found out that it was because they were going public on April 27, the day the money went into my account. What's more they are setting aside a portion of the IPO shares, shares that past IPOs only gave to rich people, for the drivers themselves! So I may get to buy some Uber shares at the IPO price before they even go on the market. Isn't capitalism great?

So what will Uber do with this infusion of cash? Some of it will go into the pockets of the owners, undoubtedly. Some of it might go to pay off debt, and some of it will probably go into more cash burning endeavors. No one is ever content to just sit back and let the money roll in. Look out Uber, Lyft might be gaining on you. Truth be told I drive for both Uber and Lyft.

Off the Top of My Head

97 Year Old Prince Philip in Car Smash. Emerges Unscathed.

by John Lawrence, January 19, 2019

The Duke of Edinburgh, Prince Philip, husband of the Queen of England was involved in a "smash" as the English say while driving his Land Rover. It was the Prince's fault as he pulled out onto the A149 and T-boned an oncoming Kia. Despite his advanced age the Prince likes to drive himself. He was without the royal protection officers. The Queen was not amused. She herself is the only person in England who is not required to hold a driver's license, and she could presumably order Prince Philip not to drive any more. But will she?

It was Prince Philip's fault. He pulled out onto the A149 while the oncoming car had the right of way. The other car was carrying two women and a baby. The baby was unhurt, but one woman had a broken wrist and the other scratches on her knees. The man who pulled the Prince out of his overturned car said he had royal blood on his hands, but Prince Philip was basically unhurt. He was taken to the nearby Queen Elizabeth Hospital at King’s Lynn and released. Buckingham Police released a statement, saying: “On doctor’s advice, the Duke of Edinburgh visited the Queen Elizabeth Hospital in King’s Lynn this morning for a precautionary check-up. This confirmed His Royal Highness had no injuries of concern. The Duke has returned to Sandringham.”

He was sure to get a good dressing down from his wife, the Queen. However, within 24 hours, another spanking new Land Rover was delivered to the Sandringham estate. Prince Philip said that he was dazzled by the sun and didn't see the oncoming Kia. The first words he uttered were, "I'm such a fool."

If the 97 year old Prince can still drive his own car, maybe I'm selling myself short with my plan to stop Ubering and Lyfting at the age of 82. I was planning to get rid of my car and just take public transportation and an occasional Lyft or Uber myself. You can get a senior transit pass for $18. You can't beat that. I figure I'll save about a thousand dollars a month by not driving. But I'm making money Lyfting and Ubering so maybe I'll reconsider and keep doing it until I'm otherwise indisposed. I just hope I don't end up like Prince Philip having an accident, or a smash as they call it, at the age of 97.

Off the Top of My Head

The Luck of the Draw

by John Lawrence, November 16, 2018

I don't like to gamble especially if there's a possibility that I might lose money. That's why I love the game I'm now participating in. It's a game of chance wherein I always win. It's just a question of how much. I'm an Uber and Lyft driver. On any given day it's possible that there are no riders, no one requesting rides or there are too many Uber and Lyft drivers in the same vicinity I'm in so that none of us get that many rides. However, I've found to my amazement that the financial results are quite consistent depending on how many hours I put in. Some days are better than others, of course, but on nine out of ten days I make almost exactly the same amount per unit time.

Some people are pissed that Uber and Lyft drivers are self-employed contractors, and as such don't have the "protections" that employees have. Well, I've been self-employed for most of my life, and the freedom that comes with it more than offsets any "protections" employees who have to work a straight eight hour shift day after day may have. When you're an Uber and Lyft driver you're never late for work, and you can turn off the apps and take a break any time your little heart desires.

You get to know where all the supermarkets and Starbucks are located because having to pee occasionally is one of the hazards of the road. Starbucks now has a corporate policy of letting anyone use the bathroom without even having to purchase anything. I buy Starbucks some times, but never when I have to pee. After the two black guys in a Philadelphia Starbucks had the police called on them because they hadn't bought anything and wanted to use the bathroom, there was a big brou ha ha over that and Starbucks announced the official policy of letting anyone use the bathroom no questions asked.

But I digress from my main point - that Uber and Lyft driving is a game of chance in which I always win, and the winnings are pretty much fairly consistent. You learn that certain times of day and certain days of the week are better than others. For instance, weekends are the best because you don't have to deal with any rush hour traffic. I enjoy giving tourists travel tips and answering their questions. You meet some interesting people and pick up some interesting tidbits of information that you wouldn't have known otherwise. At the end of the week, Uber and Lyft deposit the money directly into your account, and that's nice. You can even get paid sooner than that, but I've never needed to do that.

So the luck of the draw works for me. I've got a great car that's a pleasure to drive. I've seen some incredible sunsets. I see my beautiful city in all kinds of lights. I've got a great audio system tuned to several jazz internet channels that I listen to all day. I see people out and about enjoying themselves. I'm a fly on the wall to some interesting conversations. Yeah, to some extent, I live vicariously, but all in all I love my job. It's based on the luck of the draw, but I always win. The only way I could lose is if I were to be involved in an accident so cautious driving is paramount.