It's a different situation though. I've never seen any employee ever working for two companies in the same "shift". I see lots of Uber drivers taking Lyft trips.
Riders set the rates with demand based pricing and drivers choose which one gives them the best opportunity at each trip request. That's a unique situation, so a comparison to "every other independent contractor" misses the point here.
It’s more common than you might think. A common example is jobs where 80% of the time they just need someone there, and then someone does piecework at the same time. EX: A night watchman who's also writting essays.
Also, Uber actively discourages this by penalizing drivers who skip to many fares, which suggests they really don't want you to do this.
At some point, Uber promised to pay a minimal hourly wage so if there were no passengers requesting rides, drivers would still make (a bit of) money. The resulting scam was to sign in as a driver, then just sit on your couch, skipping fares while still making a non-zero amount of money.
>A common example is jobs where 80% of the time they just need someone there, and then someone does piecework at the same time. EX: A night watchman who's also writting essays.
But in this case, when a driver takes a Lyft passenger instead of an Uber passenger, they are actively taking business from Uber. This is more like an employee working at a call center, and answering calls for another call center on their cell phone instead of taking the ones that are ringing at their desk.
Riders do not set the rates of "demand based pricing". There is a set floor price for a car ride with uber. If no one is riding the price is still set in stone. Increasing prices based upon arbitrary percentage utilization does not make it a 'free market'.
Rates are variable, and drivers choose when to drive. I've taken several rides where the driver only works during "surge" hours. What am I missing here?
You're misusing free market. If the gov had set Uber's prices, you'd be correct. This is just Uber's model (regardless of the whole employer/contractor debate). Another competitor is free to come up with a different model where driver's can set the rate.
https://en.wikipedia.org/wiki/Free_market
> A free market is a market system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.
Uber is a price setting monopoly, the "sole authority" of the price within the Uber "marketplace". Consumers do NOT have any ability to change the price. Nor do any of the Uber drivers.
Taxis never were a free market either. But at least they didn't pretend to be one like Uber does.
EDIT: I can't reply to ori_b below yet, but: he's completely right, I interpreted the parent comment as saying something it was not. I'm not sure "free market" vs. "monopolist" is the best way to name the alternatives here, but I agree that Uber does something more akin to setting wages/commissions than creating a "market" for its contractors. Original comment below for context.
> Uber is a price setting monopoly, the "sole authority" of the price within the Uber "marketplace".
Within the Uber marketplace dilutes the definition of "monopoly" into meaninglessness. Uber competes for drivers with Lyft, SideCar, taxi companies, limo companies, and, well, every other company hiring (relatively) unskilled labor. Uber competes for passengers with, uh, again, Lyft, SideCar, and taxi companies.
A free market does not require that consumers have the freedom to choose exactly what price they will pay for a particular product or service. What defines the free market is the ability to choose between competing products and services.
If you are trying to figure out if these are independent contractors or employees, this is the question that is relevant.
Can the Uber drivers, within the Uber marketplace, compete with each other? If yes, then they are acting like independent agents. If not, they are acting like employees.
So, is Uber acting like a market, or like an employer?
You're speaking as if Uber exists in a vacuum with no competitors. And consumers do have the ability to change the price, though not directly. They could go with a taxi, use Lyft, ride a bike, take a bus, buy a car, etc--all factors that influence the demand and thus price for such services.
Lets select "this spot" as the primary arguing point, okay?
Uber has one job. Connect riders with drivers.
The "libertarian" solution is to provide a marketplace where drivers can sell their services to riders. Drivers can compete against each other by raising or lowering prices, while riders can compete against each other by similarly increasing or decreasing the bid.
Uber pretends to do this, but with a distinct difference. Uber sets all the prices. Therefore, Uber is anything BUT a free market.
Maybe you don't get it because you haven't been paying attention to Uber marketing. But I'm not claiming that Uber has no competitors. What I'm saying is within Uber's "marketplace" of "independent contractors", the drivers and riders are in fact helpless to Uber's pricing whims.
Uber is NOT a free market. But they are trying to market themselves as one. This is a distinct reason why Uber drivers have been declared to be employees.
> The "libertarian" solution is to provide a marketplace where drivers can sell their services to riders.
States create solutions. The libertarian "solution" is to do nothing and let the interactions happen organically. This could mean a marketplace, it could mean other things. It really depends on what people want, the locality, technology available, etc. And sometimes people actually want a monopoly and are happy with that. Facebook is practically a monopoly and I don't think people want 2 main social networks.
> Uber pretends to do this, but with a distinct difference. Uber sets all the prices. Therefore, Uber is anything BUT a free market.
I agree that Uber by itself is definitely not a free market place. I'll take your word that their marketing paints a different picture--seems likely.
Dragontamer is speaking as if Uber's competition is external to Uber, which of course it is. Uber sets its price and then offers services in a free market at that price, just like any other company. That makes Uber different from platforms (such as ebay) that facilitate sales but do not set prices.
A misnomer. Uber sets the prices, not the market. Uber can market the concept as much as it wants, but it doesn't change the fact that Uber sets the prices and therefore, no free market really exists.
I think you're confused about what a free market is. Uber is competing against other ride sharing services, and Uber cannot set the price of those services.
Why the downvotes? While you may argue that most countries have only a semblance of a free market, Uber does indeed have competitors and is operating under market pressure.
Riders don't set the rates, no... but I'm not sure what that has to do with a free market.
They're not saying that Uber doesn't operate in a free market. They're saying that the competition between drivers within Uber for rides whose prices are fixed by Uber does not constitute a free market.
I suppose it makes sense when applied just to Uber, but it seems misleading. Actors in a free market system will have different models that in isolation would be not so free. I thought free market deals with aggregates.
Since Uber sets prices for a large portion of the market they operate in they have monopoly power and it's therefore not a free market. Uber's at 46% market share in major U.S. markets[0], since taxi's are regulated locally and Uber is setting prices for almost half the market nationally Uber is arguably the #1 regulatory power in the U.S. personal transportation sector.
It's still early though, right? I mean, they might have some dominance now (I wouldn't call 46% in major markets a monopoly), but let's see how things shake out in a few years.
> Uber is arguably the #1 regulatory power in the U.S. personal transportation sector.
I would reserve the phrase "regulatory power" to government. I think you're using it here for the hyperbolic value.
Given Uber's recent $50bn valuation I'd say "the market" believes they'll keep their market power and resulting profits for some time into the future. (46% definitely means monopoly power but it doesn't mean monopoly.)
I am being snarky, but the libertarian poster-child is shielding 46% of the national market from competition (drivers can't compete with eachother) and that's pretty ironic.
> A free market is a market system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.
Uber is a price-setting monopoly within the Uber market. Uber is the sole authority in the prices that consumers pay and that drivers receive.
The Uber marketplace is NOT a free market. QED. Its rent-seeking behavior on behalf of the owners.
I suppose if you consider Uber to exist in a vacuum with no other competitors or outside forces. But it doesn't, so I'm not sure how your usage of free market holds up.
Sure, but Uber previously styled themselves as just a middleman between drivers and passengers - the facilitators of a market, not a force in the market of their own.
Consider a counterexample - eBay is clearly a market. Independent buyers and sellers agree to transactions, on their own terms. eBay competes for the attention of both buyers and sellers, in terms of service and fees, not on the prices of the actual goods in the market.
If the competition that's happening in the transportation market is between Uber and Lyft, and that competition is on the price of rides and quality of rides, then Uber isn't a market, it's a vendor in a market - and thus the drivers aren't vendors within Uber's market, they're just employees of Uber.
Yeah, it's a new and interesting situation. And I'm sure Uber will appeal. But assuming this turns out to be final...
As an employer Uber can set shifts for its employees and ban them from taking jobs from anywhere else while on shift.
I wonder what Uber's new privileges with respect to its workers will cost. What benefits are California employers required to pay? Paid vacation? Pay in lieu of notice for termination without cause? Employment insurance contributions? Social security contributions?
It's all going to be a moot point in the end. Transport automation is coming.
Transport automation is indeed coming. This is even worse for Uber as their main asset right now is their network of drivers. When transport automation is mainstream (still pretty far away) these services will create a race to the bottom as the barrier to entry is very low. Bigger wallets than Uber can price them out.
Barrier to entry absolutely is not low with transport automation, and network effect will prevail. Rest assured Uber will happily ditch their drivers for computers at the first possible opportunity. They are investing heavily in this in fact.
Uber's biggest asset is the installed customer base. Uber's drivers are technically their biggest liability... as this ruling well demonstrates!
Uber has another big asset that I'm surprised hasn't been mentioned. Their ride data will probably be hugely valuable for routing automated vehicles. I'd wager they have people working right now to find the optimal distribution of self-driving cars over a given metro area/time of day.
I'll also speculate this this is a pretty big competitive advantage. Collecting that much ride data is not trivial.
That won't be static in the age automated vehicles. Vehicles will be networked and this dynamic will change constantly. Uber's ride data is useless at that point.
Why do you believe the network effect would prevail when self-driving transport is available?
When I want to get from point A to point B, it doesn't really matter what my friends or other people are using, I just personally want good service at a good price - and I don't think I'd be particularly loyal to any one provider.
I expect that smaller regional providers of self-driving taxis would be able to compete on even footing with larger companies, once self-driving vehicles are purchasable commodities without heavy R&D costs.
What most people want is a car to arrive very quickly (perhaps in seconds) of predictable quality for the best fee. The largest operators with the best software and economy of scale will win this game. You won't be able to automate a single car and compete, not the least of the reason being users aren't going to jump through 15 apps to request a car, and big players will not hand you their customers.
If Uber can operate 100,000 robo-cars in San Fran you can walk up to the sidewalk and press Hail and presto you have your ride. They can dynamically balance load between nearby cities on a day-by-day even hourly basis dispatching streams of robo-cars from their garages when the surges hit. Large events which drive demand are pre-scheduled and automatically reflected in both car distribution and the number of gasoline futures they trade on the options board for the upcoming week, etc. etc.
You can bet these robo-cars will be getting robo-tire-rotations and any other effeciencies they can squeeze out. (Imagine a line of them going through Uber's robo-washers)
5? 10? 15 years out? Doesn't really matter but I'm convinced it will eventually happen. It will be awesome and terrible all at once.
Laws aren't perfect. We would never have progress if we never challenged them (in reasonable contexts, not committing outright crimes). This is clearly a case where millions of people are benefiting from a modern approach and it makes sense to review the laws to see if they still work in the current era/culture/society.
Hardly. The only way you can possibly launch something like Uber is to adopt the "Act first, apologize later" model.
Companies like Uber face problems most of us can't even imagine, such as regulatory capture by the incumbent taxi industry. Yes, Uber plays dirty, but to some extent I think they have to, because it's a dirty game.
Disagree. Uber is investing heavily in self-driving cars. When they arrive in a practical way, Uber will have a brand name, an app already installed on millions of phones, and an infrastructure at scale to handle routing and billing. Not to mention excellent free cash flow and a valuation in the multi-billions that they can borrow against. Not sure who the bigger fish in this space is who would come along and eat their lunch?
No, it really isn't. There isn't anything special about them, unless you're one of those people that believes a patent should be granted for an existing process simply because now it says, "on a computer".
I have some experience in this area of law and in my view it's how the "on a computer" aspect of the situation affects the power dynamic between Uber and the driver that makes it new and interesting.
In the model where contractors are dispatched to handle some task by phone the contractor is able to make counter offers to the company. Eliminating that through automation affects the legal test. The point I was replying to about the ability to choose jobs from different clients (Uber vs Lyft vs all the other edelivery services) also makes this different.
This is a complex area of law, which I'm guessing you haven't personally litigated, so you incorrectly compare it to the software patent issue.
Some jobs are just "sit around unless something goes wrong, then handle the situation." Something going wrong being exceedingly rare.
I knew someone who worked at a grocery store that was 24/7. Except they did close on Christmas, New Years, and Thanksgiving. The store's insurance was for a 24/7 operation - which meant that someone had to be in the store even those 3 times a year it was closed. So my friend's job 3 times a year was just to sit in an empty store by himself. Just to comply with the insurance policy.
I knew someone who was a master control operator for a TV station for the overnight shift. He told me his job was "make sure the TV doesn't go off the air" which ended up being that he was on the internet and watching TV his whole shift since the TV broadcast very rarely malfunctions. (I don't know if this is usual or not for a master control operator)
I worked as an editor on overnight TV news broadcasts (for the early morning newscasts). Since most of the early news was a recast of the previous night I typically only had about an hour or two of work. That left 6-7 hours of watching tv, surfing the internet (this was in the late 90s so much less net and slower as well), reading, etc.
Riders set the rates with demand based pricing and drivers choose which one gives them the best opportunity at each trip request. That's a unique situation, so a comparison to "every other independent contractor" misses the point here.