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Uber and Lyft Drivers to Mayor Jenny Durkan of Seattle: We Don’t Want Your Stinkin’ Wage Standard!
It seems that, in her efforts to improve the lives of poor, overworked, and underpaid ride-share drivers, Mayor Durkan has proposed “wage standards” that the companies will be required to pay all their gig-economy drivers. She reasons that those drivers are probably not earning enough, and are incurring many extra expenses brought on by (government-mandated) Coronavirus protective equipment and procedures, so their employers (See California AB5) must be mandated to pay them more.
Well, in response to that, a group of drivers called Drive Forward (called a rideshare coalition) had this to say:
Drive Forward, a nonprofit representing 2,000 members of the gig economy in the Seattle area, oppose the mayor’s minimum earning proposal, which is set at $16.39 per hour of work, and claim that it will threaten jobs and limit driver flexibility.
Members of the group spoke about how the mayor’s proposal is similar to legislation passed in New York City which has resulted in increased prices and decreased ride activity.
“We would like to see the city of Seattle not just copycat New York, which is an entirely different market than the city of Seattle,” said Michael Wolfe, the executive director of Drive Forward. “[Seattle] should be innovative, they should be thinking of new ways to address these issues.
Many of the drivers expressed how the legislation would take away from their flexibility to drive on their own schedule, which is why they chose to enter the gig economy in the first place.
“As a retired widow living on social security, the beauty of rideshare is the ability to turn on and off the app and decide to drive when and where I want to,” said Beverly Waters, a five-star driver on Lyft. “Mayor Durkan’s problematic legislation will force rideshare companies to impose and manage who is on the road at any given time because they will have to pay for all time and expenses as soon as a driver turns on the app.”
In a typical government-first attitude, the Mayor of Seattle can’t seem to understand that those drivers WANT to be independent contractors, earning what they want, when they want, and not being intent on full-time pay and benefits. I find it encouraging that the drivers are standing up to her, even though she seems to be ignoring them, and will send her requirements to the city council next week.
Published in Economics
Uber and Lyft have suspended operations in California over similar BS.
Better even a poorly-paying gig than no gig at all.
From Ace of Spades: both Uber and Lyft are terminating service in California as of tomorrow. California pulled the same stunt Jenny is pulling, and now the drivers have to find another revenue source.
Yeah, it’s kind of hard to tax wages of $0.00. Way to go, California. I’m guessing that the legislature that passed AB5 was betting on Uber and Lyft caving. Bad bet, it seems.
Check out the donations by any of Seattle’s cab companies to Mayor Durkan. Austin’s city government got lots of cash from the cab firms there to get the council and mayor to try and hamstring Lyft and Uber back in 2016-17, albeit using slightly different tactics. Gov. Abbott and the Texas Legislature stepped it to put the kibosh on that, but I doubt Gov. Inslee would have any desire to do the same thing here, and more likely would be happy to go the AB5 route like in California.
I suspect that Mayor Durkan understands this just fine, but that the taxi companies and drivers control more campaign cash and votes.
They are going to honk off a lot of Uber and Lyft users.
minimum wage laws are racist.
There is a way around these laws. The publishing industry has been dealing with them forever. The problems are as much federal as state. The big change is ObamaCare.
It will fall to the drivers to prove that they are independent contractors. Uber and Lyft will most likely contract with a staffing agency of some kind to obtain that proof. These agencies, such as AgileOne, collect and store all of the information from the independent contractors, the most important of which is proof, using W9 and 1099 forms, that the contractor actually worked for at least three companies within a calendar year.
It’s likely that Uber and Lyft will set up franchises. The franchises will be separate corporations. There will be many, and the drivers will work for the franchises throughout the year. It will be the drivers’ responsibility to make sure they work for at least three of the franchises. Most likely the industry reorganization will start with drivers simply working for both Uber and Lyft, adding more later.
The paperwork is crazy ridiculous, and all that accounting money spent won’t result in a single person getting better healthcare anywhere in this country. But the drivers will have work. Of course, they will make less because the franchises will take a cut, AgileOne will take a cut, and Uber or Lyft will take a cut. And then the IRS will step in too. The drivers will make less, and the passengers will pay more.
But most of them will be able to work. They just won’t have a formal relationship with Lyft or Uber.
All of these Internet platforms connecting buyers and sellers that started up in the late 1990s–such as Airbnb and Care.com–are heading for choppy waters. I see a sort of dot-com bust on the horizon. Their founders have been modeling these applications and websites on the original car-rental, airline reservation, and hotel-booking platforms. But there are big differences. The older travel sites dealt with reputable big-corporation sellers who knew about the legal implications of these contracts they entered into over the Internet. In contrast, this second-generation of seller-buyer matching platforms has never clarified their promises to the customers and sellers who use their platforms. Care.com, for example, has been sued in the past two years by parents who have felt that Care.com should have vetted a bad caregiver with whom they connected via the Care.com website. There are lawsuits against Airbnb too for similar reasons. And there have been many unresolved tax issues for the sellers.
These platforms were an innovative use of the Internet. They would have been invaluable to people if it weren’t for the government at all levels trying to cash in on the little bits of money being exchanged. It’s a shame that they can’t continue as they were. Nevertheless, I’m sure that some semblance of the original sites will survive.
Let me explain the ObamaCare angle better.
Before ObamaCare was passed, low-income people–including low-paid independent contractors such as landscapers, caregivers, hairdressers, and freelancers of all kinds–could not afford health insurance that was useful. The plans available were too costly, and the deductibles were ridiculous. With rising costs for healthcare, the hospitals were taking a big hit. Sometimes they put people on Medicaid, and that helped. But for the most part, these were uncollectible accounts.
ObamaCare was designed to address this issue, the impetus and urgency being that the hospitals’ charitable care accounts were running on empty. What the government thought it would do is declare these independent contractors employees, and the government would make the companies pay for their healthcare. The companies said no. They simply disconnected themselves from the independent contractors.
ObamaCare was a dumb answer to these problems, and presently there are 27 million people who have no health insurance. I’m sure that number is quite a bit higher today with the nationwide covid-19 layoffs.
For all of the money this country spent on ObamaCare, the American people on the lower end of the income scale are no better off today, and the system is driving doctors and hospital staff positively bonkers. The price tag for this boondoggle is beyond my ability to calculate or imagine.
That, or they want to force people to use mass transit . . .
Where they can increase their chances of getting covid-19.
Another example of corporate greed.
That certainly was the intent in adopting them in the first place in the early 20th century – price black men out of the labor market. And the demographic most negatively affected by continuing minimum wage laws is young black men.
Marci might be right that Uber and Lyft will side-step such restrictions. If not, Bill Whittle thinks the economies of Los Angeles and similar cities will tank because so many people rely on these services. Note that UberEats and food delivery services during the lockdowns are included.
I continue to be astonished at the failure of politicians and advocates to understand that some people might want to make choices different from the choices the politician or the advocate might make.
I think they understand very well. That’s why they’re opposed to choice and prefer mandates, instead.
That’s something we probably should better understand – do regulation advocates truly believe that there is one “best way” and that choice is inherently counter-productive, or do regulation advocates just not understand that different people are better off making different choices?
I suspect they have trouble reconciling those ideas. They often come out against choice just because — it’s confusing, it’s inefficient, whatever. If I had a tool to examine their minds more closely, I’d investigate whether they have a sense of aesthetics that glories in uniformity over diversity, and overrides whatever sense of reason they have. Or it may be that they realize there can’t be a centrally-controlled economy with so many variables, so they prefer reducing the economy to what they imagine is a solvable equation.
I would be willing to have megadollar government grants go to research to study this phenomenon, which might in turn give us ideas on how to treat it.
One thing I’m pretty sure of. It’s not as though we and they have the same objectives and just differ on how to reach them.
Maybe, in the long term. That would cost considerable capital to set up, and considerable time. This in a time where demand is being repressed by government fiat. They could still do it, but likely would have to do it in their remaining territories, costing more capital and more time.
Or they could kick California to the curb.
The fact that they are both taking the same action suggests that my initial guess as to the amounts required are probably low.
I did watch the Bill Whittle episode that Aaron linked to, and it is pretty powerful. Except, what did people in LA do before Uber and Lyft existed? They must have gotten around some way. This has always been my attitude toward things that are done away with, or changed.
They had taxis, and I imagine they still do. However, for some reason (price or convenience or whatever) people frequently used the upstarts.
Ah, breaking news: just got an e-mail from Lyft. They’re still in operation until the November election (Prop 22–as I understand it–exempts drivers from AB5. Hope the whole damned thing goes soon.) Either Atlas Shrugged or Gavin Blinked. Possibly the court.
The main appeal for me was quicker response time (about 5 minutes to get a ride vs. 15 for a taxi in my neighborhood) and generally better and more convenient service. Similar prices but the taxi never offered me a discount (or peak pricing, but sometimes it’s nice just to have a chance to get home, hang the cost.) I believe you can do shared rides for less, but I haven’t. It also makes cheaper public transportation more viable (especially in terms of time–a lot of time and space in these parts), given that there are areas difficult to access by bus or train. Lyft and Uber make a lot of trips possible that are difficult otherwise.
Which in turn provides more cases, thus giving government the justification to continue its onerous restrictions . . .
A court granted a temporary injunction, apparently, to give Lyft more time to pursue their lawsuit. I’ve also been told that Uber is pursuing making all their drivers franchisees, as a way of getting out from under the law. More power to them.
I find it hilarious that we received a letter recently from our local newspaper, asking us to call our legislators, urging them to grant an exemption from AB5, for newspaper carriers. It seems that, with the failing fortunes of media, particularly newspapers, the changes wrought by AB5 could well drive them out of business altogether. Our local paper is a McClatchy paper, which has recently filed for bankruptcy. The paper urged passage of AB5, saying that this would be really great, and the only fair thing to do. At that time it did note that there needed to be an exemption for newspapers, but there would be time to work on that later. Well, it’s time to pay the piper, Mr. Bee. It’s the pits to by hoisted by your own pitard, isn’t it?
Many of us recognized the disaster that AB5 would cause. The only way it passed at all was due to the number of exemptions granted, to quiet opposition from various businesses and organizations. As far as I know, none of these groups favored passages of AB5 – they just agreed to drop their (single issue) opposition. This was the case of my professional organization of private investigators. AB5 would have been a disaster for us. But we got an exemption.
Exemptions. That’s how most progressive/socialist programs work. Those programs includes high taxes on the rich. But nobody really wants to stop the ability of those with assets to invest in municipal bonds, because otherwise how could the ruling class extend its empire? So, exemptions.
Here’s an innovative way of thinking: Mind your own business. If you think gig driving isn’t a desirable way to earn a living, don’t be a gig driver. There are tons of jobs I wouldn’t want to do. It never occurred to me that I should propose legislation to change the nature of all of those jobs.