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Friday, August 21, 2020

Corporations that can't play by the rules

How can "gig economy" corporations expect to survive if they have to obey the laws? Obviously, they can't, as Uber and Lyft flee California due to their inability to continue abusing their drivers:
After a California court’s preliminary injunction required Uber and Lyft to reclassify drivers as employees, both companies threatened to shut down their ride-hailing services, with the latter confirming the move.

Lyft will suspend its transportation activity in California at 11:59pm local time on Thursday, the company announced in a blog post. “This is not something we wanted to do, as we know millions of Californians depend on Lyft for daily, essential trips,” the company – valued in the billions of dollars – lamented.

“We’re personally reaching out to riders and drivers to share more about why this is happening, what you can do about it, and to provide some transportation alternatives,” it added.

The drastic move was prompted by a preliminary court decision last week that required Uber and Lyft to stop classifying their drivers as independent contractors.
If your business model is dependent upon breaking either the employment or the consumer laws, it isn't a sustainable one, no matter how heavily Wall Street may be willing to invest in it.

Gig economy gigs lower the price of labor, which in the USA has remained flat since 1973. It is as deleterious as the doubling of the female workforce and the mass immigration that are the two primary contributors to the low price of labor that has rendered US society unstable and destroyed the middle class.

The important thing to remember is that consent does not define morality. The prostitute consents to sell her body, the debt-slave consents to sell his labor, and the defrauded consents to invest his money, yet we find these practices to be both morally wrong and illegal. California gets many things hopelessly wrong, but its strong legal protections for employees and consumers against the rapacious predators of the financial class is not one of them.

And if you think Uber is a fine capitalist corporation being abused by the socialists in the California legislature, I suggest you look up the documents related to Abadilla et al v. Uber Technologies, Inc. and you will rapidly learn otherwise. I don't know much about Lyft, but Uber is an abusive, lawless, and hypocritical organization that mandated independent arbitrations for its drivers, then spent FIVE YEARS in a futile attempt to prevent more than 12,000 of those drivers from exercising their only remedy against the corporation's mistreatment of them.

In fact, this decision to flee California is a consequence of the two corporations' long-running attempts to avoid the arbitrations they mandated. Sound familiar?
In combatting these individual arbitration claims, the ride-share companies adopted several tactics including: 1) delay the arbitrations by not paying the arbitration initial filing fees, 2) challenging their opposing counsels’ qualifications, and 3) offering incentives for employees to drop their arbitration claims.
Don't be surprised when Patreon suddenly announces an "unexpected" relocation to Utah.

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95 Comments:

Blogger Sillon August 21, 2020 6:37 AM  

It is the same with most if not all large corporations, if they had to play by the same rules as the rest of us, for example in the tax department, 99% of they won't be viable nor able to get to monopoly status.

Small is beautiful, big leads is oppression.

Blogger Dan in Georgia August 21, 2020 6:39 AM  

Shutting down in California, rather than obeying the law will open up other alternatives that have not been able to compete against Uber and Lyft. The drivers are not going to be unhappy about this. Many of them have regular passengers that they take to the airport several times a week off-platform. If you do it long enough you will see the same riders going the same place many times. This is a great time for alternatives that don't treat the drivers like slaves. Early on Uber was paying drivers $3-$5 per mile. Now it's down to $.60 if you're lucky. Bust the trusts.

Blogger Gregory the Tall August 21, 2020 6:44 AM  

And they have certainly ruined a lot of small independent taxi companies and independent drivers in many countries.

Blogger Crunchy Cachalot August 21, 2020 6:46 AM  

All these fictional legal people, either bloated with useless "human resources" or trying their damnedest to not have any at all, but whatever incarnation they choose, we always end up holding the booty end of the stick.

And actual yet dumber people think this is "capitalism".

Blogger Troy Lee Messer August 21, 2020 7:10 AM  

I always hated the idea of consent re employment law. consent implies free will. i dont approach a job with free will. i get a job so i can eat. i work to satisfy involuntary needs. if i dont eat, i die. and to not starve, i will suffer many indignities. I been on the street homeless and it sucks. the whole concept of free will implies lack of duress.

i get it, you have to work and earn your way through this world. But damn I have a sore spot for employers










Blogger Macs August 21, 2020 7:26 AM  

California made subcontracting illegal accross the board. That place is ruled by maniacs.

Blogger Azure Amaranthine August 21, 2020 7:29 AM  

"It is the same with most if not all large corporations, if they had to play by the same rules as the rest of us, for example in the tax department, 99% of they won't be viable nor able to get to monopoly status."

This PRECISELY. Just as a complex problem is best met with a simultaneous array of tailored solutions, a megacorporation cannot possibly be as effective, efficient, and as loyal as smaller businesses brought up in local environments.

The only reason these corporations can even survive is that they amassed enough pull to start playing at the crony political game rather than the game on the ground where the smaller "rodent" businesses would eat their maladapt dinosaur carcasses alive.

"And actual yet dumber people think this is "capitalism"."

It most certainly is. The sole guiding principle of capitalism is to make a profit. Now answer, what profits it a man to gain the world entire but lose his essence? A profit for what? For whom? To be expended for what purpose?

Blogger Roger August 21, 2020 7:32 AM  

Darn, I would have more money too if I did not obey the payroll laws. Heard a bit more about what rat ... scoundrels they are. When you tip using the app they keep part of it.

Blogger rikjames.313 August 21, 2020 7:32 AM  

Amazon is opening "data centers" in various rust cities. I suspect a change up of the arbitration location is coming.

Control the location of the panel, control the outcome.

Blogger Silent Draco August 21, 2020 7:34 AM  

Interstate flight to avoid the consequences of actions already committed - oh, that'll end well. *Snort*

Blogger Rocklea Marina August 21, 2020 7:37 AM  

>>consent does not define morality

Dialectic can be great rhetoric too.

Blogger upchuckmcduck August 21, 2020 7:41 AM  

Does anyone know if Twitch would fall under this ruling? Last I heard if you are a partner on twitch you are not considered an employee for tax reasons but are also not allowed to stream on other platforms which makes it seem like you would be an employee then.

Blogger Shimshon August 21, 2020 7:43 AM  

A real gig economy would let the workers set their rates and choose their fares and destinations.

I recall reading that Uber does none of those. It sets the rate of the hire and forces the driver to take any prospective rider, however vibrant, to any destination they want, even dangerously vibrant. They don't know Uber's cut, which is intentionally obscure. It's a way to impose diversity and drive down compensation.

I was in the states several years ago, and during that trip, used Lyft a bunch of times. I was curious how the drivers liked it and whether they could make money doing so. The drivers I had, generally a vibrant but heavily male bunch, were mostly personable and friendly (I had one bad experience out of about a dozen), and enjoyed the work and at least some were making very good money.

The idea behind the companies is a good one, but executed badly and could only devolve into low compensation wage slavery as these companies inevitably increased their take over time, as (@2) Dan in Georgia points out. I wonder if today those drivers get the same compensation for the same fare collected by the company. I doubt it.

Like much of high tech, these companies are inherently bad by virtue of the entire venture capital model of Grow Big Fast. They are just apps using off the shelf technology to solve a problem. As Dan in Georgia also pointed out, close these companies down, and the market is opened to leaner, hungrier, more ethical alternatives.

Israel does not allow these companies to operate. We have Gett, which is similar, but only for licensed taxis. So it doesn't take away their business, but it obviously increases costs on top of the regular fare.

Blogger S1AL August 21, 2020 7:44 AM  

Regardless of the specific issues re: Uber and Lyft, AB5 is a horrible law. The "gig economy" allows for incredibly flexibility. I'll take the lower wages in exchange for being on my own schedule and not having to spend hours commuting for a 9-5 or complying with standard corporate bullshit.

Blogger John Regan August 21, 2020 7:47 AM  

"...consent does not define morality." So true. Well put. Thank you.

Blogger God Emperor Memes August 21, 2020 8:03 AM  

When Uber started up in New South Wales, the taxi companies sued the government for compensation. I didn't understand why, initially, until it was explained that Uber wasn't paying for licenses in the way the taxi operators were forced to do. I still use taxis and give no money to Uber.

Blogger Ken Prescott August 21, 2020 8:15 AM  

The basic model of capitalism revolves around land (natural inputs--land, air, water, etc), capital (man-made goods used in production--machine tools, etc), and labor (physical and mental contribution of employees). Successful businesses deliver a return on capital investment sufficient to (a) pay the bills (wages, taxes, materials used, etc), (b) cover the cost of capital (maintenance and repair of machine tools), and (c) after all that, generate a return on investment commensurate with the level of risk inherent to the business.

In this model, some wealth flows from the investors/owners to the laborers in the form of wages. Some wealth flows to landowners in the form of rents; some wealth flows to vendors in the form of payment for goods and services used.

Uber and Lyft get around the capital investment requirement of a taxi service (i.e., the need to purchase vehicles) by having labor provide the capital. To make a return on investment, they don't pay labor enough to cover the capital cost, let alone a fair wage on top of that--even at $3-5 per mile in their early days, that wasn't enough. Their system is designed to transfer wealth from a large number of poor to lower middle class people to the wealthy owners and investors. It is inherently destructive (you eventually run out of drivers with vehicles that meet Uber/Lyft specs).

Blogger Robert What? August 21, 2020 8:17 AM  

The gig economy is the only way millions of people can make money to put food on the table.

Blogger Newscaper312 August 21, 2020 8:45 AM  

I had an issue with Doir Dash a few months ago, which I had never used, w a fraudulent account opened w my name and email and AMEX acct. Email was not hacked itself, fortunately. AMEX detected the fraud and nuked the charges readily but it was terrible trying to contact a human being at DD. Funny how nothing in their system flagged a $20 McDs order with a $60 driver tip. They finally nuked the account - I recovered pw and could login, but lacked something to close it myself. No explanation, no apology.

After that I looked them up. Scumbags. Had a big suit from their drivers in 2017 IIRC. App has an option for customers to tip driver thru the app, but DD was taking well over half of the tip money.

Blogger Brett baker August 21, 2020 8:48 AM  

Now if we can crush the "think tanks" that provide cover for these people....

Blogger Crew August 21, 2020 8:52 AM  

About women in the workforce, it seems the Democrats' attempts to defeat the God Emperor via fake Corona Virus lock downs is going to bringing unwanted changes:

Working mothers are quitting to take care of their kids, and the US job market may never be the same

Of course CNN is saying that women and children are hardest hurt ...

Blogger maniacprovost August 21, 2020 9:14 AM  

Clearly something isn't working the way we'd like with the "gig economy" as envisioned by these companies and the delivery services, tech in general. Is it some kind of regulatory side effect, pure shadiness on the part of the companies, we're just the market power inequality between corporation and poor transient laborers? No idea.

However, ride-sharing services are inevitably going to result in sub-survival wages for drivers. I always considered Uber and Lyft to be a temporary phenomenon. The technology, if unfettered, would enable every driver on the road to pick up riders along their path. Therefore the fees would be minimal and not cover the majority of the drive time. This can all be done P2P or by much cheaper leech companies. Think crunchyroll.

I don't expect that to come about for a while, but it's feasible.

Then you have the self-driving car phenomenon. Regardless of whether they're actually that good or safe, they're going to be available eventually. I know they're technologically not as close as they claim, but that's mainly due to lack of really good brilliant inventors working on the project and AI in general.

Personally, I've given a fleeting thought to joining the gig economy. The difference is that I have valuable skills, which driving a car is not.

Blogger megabar August 21, 2020 9:16 AM  

Uber should be able to operate more efficiently than a cab company from both their technology and the model, so I don't see any fundamental reason why they aren't sustainable and cab companies are, except for greed, mismanagement, or lack of monopoly -- none of which I rule out. I agree that if labor were priced more fairly, Uber would be more expensive and thus shrink its potential market.

Uber has a lot of positives. The phone application is a far superior and more reliable way to get a ride. The flexible, low-barrier approach to employment for drivers raises the overall number of drivers at any time, and allows people to supplement their income as they see fit.

*If* self-driving cars ever arrive, pairing them with an Uber-style system would be amazing for urban areas.

All told, it's disappointing if they are treating their drivers poorly.

Blogger Peter August 21, 2020 9:19 AM  

They will just move to Texas or Alabama...

Blogger RandyB August 21, 2020 9:31 AM  

The "gig economy" is explicitly intended to circumvent the rules, to the benefit of the investors and at the expense of everyone else.

Blogger szook August 21, 2020 9:36 AM  

"Was is dis oo-tah any-vey?"

Blogger VD August 21, 2020 9:47 AM  

I'll take the lower wages in exchange for being on my own schedule and not having to spend hours commuting for a 9-5 or complying with standard corporate bullshit.

That's retarded. Lower wages is why your society is collapsing.

Blogger VD August 21, 2020 9:48 AM  

The gig economy is the only way millions of people can make money to put food on the table.

That is only because tens of millions of workers have been allowed to immigrate and drive down wages.

Some of you are clearly economic illiterates.

Blogger maniacprovost August 21, 2020 10:04 AM  

That is only because tens of millions of workers have been allowed to immigrate and drive down wages.

If we removed 10 million low skilled immigrants from the equation, then taxi driving might be more lucrative.

... In theory, having "labor" provide the "capital" of the car is a good thing as it allows poor people with a moderate investment to become "capitalists." In reality of course they don't have the math and long term planning skills to succeed.

Blogger Crew August 21, 2020 10:08 AM  

and allows people to supplement their income as they see fit

They could learn to code. They could write novels about Uber drivers who are super duper spies or about aliens who hide out on Earth and work as Uber drivers and sell the novels on Amazon.

Blogger Ska_Boss August 21, 2020 10:57 AM  

Women exiting the work force en masse is a good start to bringing wages back up. Now if we could only get the minorities and visa holders out...

Blogger Jeroth August 21, 2020 11:01 AM  

But Dan Crenshaw told me Republicans are the Party of Uber. Uber has what capitalism craves.

Blogger Seeingsights August 21, 2020 11:12 AM  

Vox Day wrote: California gets many things hopelessly wrong, but its strong legal protections for employees and consumers against the rapacious predators of the financial class is not one of them.

I happened to read about the recently deceased actress Olivia deHavilland. From what I understand, in the 1940s she sued a movie studio—a California company-over her contract. She was tied to the studio for seven years; the movie studio interpreted it as seven years working time , her attorney argued that the California statue means seven calendar years.

The court ruled in her favor. A big consequence of this is that movie actors now had their bargaining power increased. Actor David Niven publicly praised her on this.

Blogger KPKinSunnyPhiladelphia August 21, 2020 11:15 AM  

Ken Prescott wrote:T

Uber and Lyft get around the capital investment requirement of a taxi service (i.e., the need to purchase vehicles) by having labor provide the capital. To make a return on investment, they don't pay labor enough to cover the capital cost, let alone a fair wage on top of that--even at $3-5 per mile in their early days, that wasn't enough. Their system is designed to transfer wealth from a large number of poor to lower middle class people to the wealthy owners and investors. It is inherently destructive (you eventually run out of drivers with vehicles that meet Uber/Lyft specs).


Correct analysis. Ironically it's a business model that looks almost perfect but by its very nature is doomed to failure. Uber and Lyft are unsustainable as businesses.

Why? Effectively Uber and Lyft have NO assets. Businesses that survive and prosper own assets that they can turn into cash. Those assets can be tangible, like a steel mill, or intangible/virtual, like consulting services that customers value.

Uber and Lyft are doomed. AB5 won't kill it -- the inherent instability of the business model will.

Meanwhile, many of Vox's points are indisputably valid, though the phrase "surplus value of labor" might have fit right in as part of his critique.

But as another commentator pointed out, AB5 is a terrible law. It's a band-aid and a false "solution" that obscures the real root causes, which Vox has identified: unbridled immigration, a failure to secure the nation state and its manufacturing -- all the usual suspects.

Our problems are not going to be solved by a bill thought up by a low IQ invader like Representative Lorena Gonzalez Fletcher ("Fletcher"...how Anglo!!).

AB5 is leftist's wet dream -- let's pass a law that will help "the little guy" against the "big bad exploitative corporation." Indirect "price control" is its bogus and ultimately ineffective mechanism, because every problem is a nail that requires our price control hammer.

My understanding is that there's a referendum on the California ballot to exempt ride services from AB5. Don't be surprised if it passes. Lots of people like Uber and Lyft, the same way they like sugary soda and Cheetos.

Blogger J.M. August 21, 2020 11:15 AM  

VD wrote:I'll take the lower wages in exchange for being on my own schedule and not having to spend hours commuting for a 9-5 or complying with standard corporate bullshit.

That's retarded. Lower wages is why your society is collapsing.



I'll say it, you are on your right to ban me if you so desire, here I go: Vox, as an economist, you should know very that's not the case at all, damn, in your own blog you have posted several times the reasons behind our collapse. And lower/stagnating wages is just a symptom of the disease, not the cause. Feminism, women labor and mass immigration have more to do with our decay...

Blogger J.M. August 21, 2020 11:17 AM  

VD wrote:I'll take the lower wages in exchange for being on my own schedule and not having to spend hours commuting for a 9-5 or complying with standard corporate bullshit.

That's retarded. Lower wages is why your society is collapsing.



I'll say it, you are on your right to ban me if you so desire, here I go: Vox, as an economist, you should know very that's not the case at all, damn, in your own blog you have posted several times the reasons behind our collapse. And lower/stagnating wages is just a symptom of the disease, not the cause. Feminism, women labor and mass immigration have more to do with our decay...

Blogger S1AL August 21, 2020 11:25 AM  

"That's retarded. Lower wages is why your society is collapsing."

I honestly can't believe you just said this. You've gone over the reasons that American society is collapsing. Lower wages are not even a third tier reason.

Lower wages with lower expenses is often a net gain. I've dealt with expenses and income as both employee and business owner in multiple states. The more "protection" there is, the less margin and the more corruption. 100%, every time, give me remote employment with flexible hours as a contractor over hours of commuting and sitting in an office. More money is meaningless if expenses are out of control and you're working 10+ hidden hours a week. There's a reason that six figures don't even qualify you for middle class status in much of California.

*My* state isn't collapsing. Texas isn't collapsing. Florida isn't collapsing.

California is collapsing. New York is collapsing. States with so-called "worker protection" are collapsing.

"Right to work" states aren't collapsing. What on Earth is the purpose of "employee protection" if there's no employment?

Did California's employee protection James Damore?

But Democrats want AB5 at a national level, so that they can disemploy everyone who doesn't want to suck it up as an employee of protected corporations. Because "protections" always come with cop-outs for the power players. Hollywood got an exemption. What a surprise.

So much for California's "worker protection."

Meanwhile, Indie game devs announce they can no longer contract in California.

No protection for people who want Independence.

If that's the price of "worker protection", I'll take the lower wages, thanks

Blogger Trid August 21, 2020 11:38 AM  

For every person able to buck solid dependable employment and make a living working 20hours a week freelance in soiled dungarees there are 99 working 12 hour days scrabbling for every penny.

"Muh gig economy" was a scam from the start

Blogger VD August 21, 2020 11:42 AM  

I honestly can't believe you just said this. You've gone over the reasons that American society is collapsing. Lower wages are not even a third tier reason.

Lower wages are a direct consequence of two of the first tier reasons, feminism and immigration.

If you were more intelligent, you would understand the intrinsic connection.

*My* state isn't collapsing. Texas isn't collapsing. Florida isn't collapsing.

Yes, they are.

Did California's employee protection James Damore?

Yes. Damore walked away with a lot of money as a result of those protections.

If that's the price of "worker protection", I'll take the lower wages, thanks.

Enjoy your serf life. Your reactive defense of abusive corporations is either ignorant or insane. Note that on the basis of your reasoning, the exemptions are a good thing. Until you give up the binary thinking, you'll never understand anything.

Blogger VD August 21, 2020 11:46 AM  

I'll say it, you are on your right to ban me if you so desire, here I go: Vox, as an economist, you should know very that's not the case at all, damn, in your own blog you have posted several times the reasons behind our collapse. And lower/stagnating wages is just a symptom of the disease, not the cause. Feminism, women labor and mass immigration have more to do with our decay.

I'll try to talk slower and spell everything out more carefully for you midwits next time.

But since some of you can't follow anything that isn't spelled out pedantically, in the interest of strict accuracy I should have written that "Lower wages are the inevitable consequence of the higher percentage of women entering the workforce, mass immigration, and trade deficits, which are three of the primary reasons your society is collapsing."

Only midwits don't understand shorthand.

Blogger Rocklea Marina August 21, 2020 11:53 AM  

The Nationalist should want to discourage the free movement of people both within and without borders. Redundancy over efficiency. Predictable stable employment or self employment under stable regulation that discourages predatory behaviour is the carrot as opposed to the stick of a "free market" that forces people to move for work.

Blogger Jason the Gentleman August 21, 2020 11:55 AM  

Wow, Vox has triggered something with this one. This is probably where those who are more dedicated to Republican/Libertarian talking points have a hard time with Vox because they can't see the forest for the trees, though he just outlined it above such that even those triggered should be able to follow.
I don't believe the point is that Gig jobs are bad in and of themselves. The point is that these are being chosen at such a low wage point because of the things destroying our society. Being independent and entrepreneurial by making your own business where you take on work, or gigs, at your own discretion and the price point you set is one thing. Having to set that respective price super low because there is an inordinate amount of competition due to the aforementioned reasons is where it becomes a bad thing.

Blogger Reziac August 21, 2020 11:56 AM  

California's labor laws are NOT there for the protection of the workers. They are in place to protect unions, and union dues. Anyone who ever works in a mixed (union and non-union) shop in CA quickly discovers this.

The new regulations are not meant to screw the gig economy; they are intended to force more people to join the unions.

Also intended to ensure that gig workers can't skip out of payroll taxes and other expenses paid to the state, which amount to 70% of the cost of a legal employee. (Hence the popularity of illegal labor.)

Blogger S1AL August 21, 2020 12:04 PM  

Lower wages are a direct consequence of two of the first tier reasons, feminism and immigration.

If you were more intelligent, you would understand the intrinsic connection.


I understand the connection just fine. There's a certain irony to defending California, H1-B capital of the country, for its worker protections, however.

So allow me to clarify: all else being equal, I'll take the lower wages with the freedom over the higher wages. And I have been in both situations. I walked away from a significantly higher income a year ago for the freedom of my current situation.

Ironically, it also meant that a bunch of expenses went away and a bunch of tax benefits were gained that will result in higher net income, not to mention a dramatic reduction in stress and negative health effects. And because I can convert my work ethic and productivity directly into income, it means I'll shortly surpass my old income while keeping my freedom.

This would not be possible under the restrictions of AB5. I very much have skin in the game here.

It's the opposite of "binary thinking" to understand that I can (1) oppose immigration because of its deleterious effects, (2) also want the freedom to build my own income without the state telling me I have to be an employee of a megacorp. Government "protection" increasingly resembles mob "protection".

Enjoy your serf life. Your reactive defense of abusive corporations is either ignorant or insane. Note that on the basis of your reasoning, the exemptions are a good thing. Until you give up the binary thinking, you'll never understand anything.

I'm not defending any corporation. I don't care about the specifics of Uber and Lyft. I have never contracted with either of them. But that's the point: this isn't about Uber and Lyft.

Hell, I completely understated my case because I forgot about the specifics of cab companies in California: https://abiweb.com/info/ab5/

That's right: all the cab companies were already classified as contractors and all the cab companies want exemptions. All of them. None of them want this legislation. You are supporting one of the single most dishonest and abusive pieces of legislation introduced anywhere in this country in the last 50 years.

AB5 doesn't protect workers except to force them into the serf life. This bill destroys small businesses. It destroys independent contracting and the contractor's freedom to walk away from abusive employment. That's the definition of a serf: you have employment, sure, but you can't ever leave. Congrats, you either work for the megacorp or you don't work.

I'm saying NO to that.

Blogger d August 21, 2020 12:12 PM  

TL;DR: Judge Edward M. Chen is a judicial racketeer?

Blogger KPKinSunnyPhiladelphia August 21, 2020 12:31 PM  

Reziac wrote:California's labor laws are NOT there for the protection of the workers. They are in place to protect unions, and union dues. Anyone who ever works in a mixed (union and non-union) shop in CA quickly discovers this.

The new regulations are not meant to screw the gig economy; they are intended to force more people to join the unions.

Also intended to ensure that gig workers can't skip out of payroll taxes and other expenses paid to the state, which amount to 70% of the cost of a legal employee. (Hence the popularity of illegal labor.)


Another absolutely correct analysis. I slapped myself upside the head for not saying that in my first post.

Again, AB5 is a classic shitlib leftist head fake. Vox correctly diagnoses our plight, but the Uber/Lyft business approach is just another symptom of that plight.

At first glance, the law LOOKS like therapy, but it isn't. It's designed to extract money, favor allied political groups, and cement government power.

It's a rentier law.

Blogger ADS August 21, 2020 12:33 PM  

Ridesharing services did torpedo the crony capitalist practice of requiring licenses for taxis, artificially limiting the number of issues licenses, and benefitting from kickbacks from the wealthy interests that therefore monopolize taxi services.
The abusive nature of Uber et al isn't the gig nature of the work but the low rates and deceptive advertising that takes advantage of economically illiterate workers.
An ethical rideshare service:
The company provides an app for use by drivers and riders. For the drivers, the onboarding process includes lessons about depreciation of assets, business expense itemization and tax planning, and the other various factors that are relevant to the small entrepreneur. This would produce a suggested price per mile to charge, and allow the drivers to set their rates guided but not constrained by this information. The drivers would also draw on a map to determine the areas to which they're willing to travel. For this service, the app company charges a flat monthly subscription fee.
Riders: put in your trip and the app matches you with a list of drivers who will fulfill the trip, their prices, and their profile. When the driver pays for the ride, a percentage markup is added to pay the app company.
Rideshares structured in this manner aren't exploitative or immoral and would allow micro-entrepreneurs to run a genuine transportation business.

Blogger VD August 21, 2020 12:44 PM  

You are supporting one of the single most dishonest and abusive pieces of legislation introduced anywhere in this country in the last 50 years.

I'm not supporting that piece of legislation. I haven't even read it or written anything about it. I'm supporting abusive corporations being held accountable to their arbitration contracts and CCP §§ 1291.97-99.

FFS, you haven't even read Abidilla v. Uber, have you?

Uber was breaking the law even more shamelessly than Patreon. AB5 may well be horrible law, but it was passed, at least in part, in response to Uber treating its contract-drivers very, very unfairly and trying to change the rules on them at will.

Sometimes there are no good guys.

Blogger Ominous Cowherd August 21, 2020 1:04 PM  

Ngrams tells us that until 1880, capitalism was not a word in common use. It's used roughly 1,000 times more commonly today than in 1880.

I'm starting to believe the story that capitalism is nothing more than a strawman Marx set up to make his communism look good.

Blogger Damelon Brinn August 21, 2020 1:04 PM  

The "gig economy" allows for incredibly flexibility.

That's true, but our worker and consumer protections are oriented toward the 20th century employer/employee and company/customer models. Switch to a new model that avoids those, and it doesn't take long for corporations to bring back sweatshops. For those of us who aren't libertarians who think sweatshops are awesome, we're going to have to figure out how the people at the bottom can protect themselves in the new model. Otherwise the corporations will make sure any new rules are stacked in their favor.

Blogger Rocklea Marina August 21, 2020 1:10 PM  

>>Ridesharing services did torpedo the crony capitalist practice of requiring licenses for taxis, artificially limiting the number of issues licenses, and benefitting from kickbacks from the wealthy interests that therefore monopolize taxi services.

Uber destroyed a created asset class for millions of people around the world and destroyed their retirement plans. Then replaced it with what? Sharecropping where you bring your own everything. The taxi industry wasn't perfect but it was regulated and predictable and industrious drivers had the opportunity to get their own plates and develop an asset. Uber does none of that. They are scabs with no skin in the game. Rideshares of any nature would be nought but the same.

Blogger Damelon Brinn August 21, 2020 1:23 PM  

But Dan Crenshaw told me Republicans are the Party of Uber.

Typical GOP thinking. Uber employees gave 81.5% of their 2018 midterm donations to Democrats. Lyft gave the Dems 96.1%. So naturally a Republican wants to kiss up to Uber. Always chasing the group that hates them a bit less than another group.

Blogger Snidely Whiplash August 21, 2020 1:26 PM  

AB5 is a rational and predictable response to the abuse of employment law, as pioneered in California. AB5 did not spring fully formed from the head of the Beast in Sacramento. reclassifying your employees as "independent contractors" was tolerated when it was about the ability to dismiss non-productive people and evade benefits. It's when it went the Uber/Lyft route of reducing your employees to poverty while evading every business regulation on the books that it became necessary to outlaw it.
There is a space between "C2C contractor" and "Commuter Drone".
I have a friend who drove Uber/Lyft some years ago. He did the math, bought a used Prius, worked about 60 hours a week, and made a good living at it. Then about 3 years ago, both companies reduced their rates. He did the math again, and determined that at the new rates, he would simply be working 60 hours a week to slowly donate his car to Uber. Sold the Prius and went back to driving trucks.

Finally, lower wages are one of the mechanisms by which feminism and mass immigration are destroying our society.

Blogger Jeff Weimer August 21, 2020 1:30 PM  

That's all well and good, but AB5 is an abomination for all sorts of other reasons.

Blogger Gospace August 21, 2020 1:32 PM  

I know people who drive drive for Uber and Lyft- and a similar company Uship for package transport. All the drivers I know are happy with what they're doing. Only one is in a position where it's her primary income source.
Before widespread adoption of cell phones- all these companies would be non-starters. The closest thing to them would be NYC's unlicensed gypsy cabs and jitney buses.

The thing "consumer advocates" hate about the two is demand pricing. One of the drivers I know is very happy working just the nights when there are games or concerts in the downtown of the city he lives near. One to two thousand dollars for a nights work hauling drunks around. Because of demand pricing. Standard cabs? They hate those nights because most of the trips are short ones- with small fares. And then they've got to find another rider using the mandated rules...

And there are tax benefits to working for them. Going a long distance from Point A to Point B? Turn your app on- look fro riders needing to go that way. Keep it on to see if you can pick anyone up along the way. Didn't get any? Oh, well- the mileage is still a business expense- you were looking for riders.

For the class of employees called "cab drivers" the gig economy doesn't cut down income. In cities with "medallions" drivers have to "rent" the cabs from the medallion owners- at pretty high rates, and don't start to make money until they've had enough riders to cover the rental fee. For company owners- the gig economy is a disaster. I know one of those- someone I went to junior high school with. He rails against Uber/Lyft for destroying his business. Small company, I thing he only had 5 or 6 cabs. All his former drivers now drive for- Uber/Lyft. And they weren't employees with benefits- they rented his cabs.... so they weren't really employees.

I don't have a clue what their contracts read like. I don't know any of the unhappy drivers- I only know ones that are satisfied.

Blogger Snidely Whiplash August 21, 2020 1:32 PM  

Damelon Brinn wrote:Switch to a new model that avoids those, and it doesn't take long for corporations to bring back sweatshops.
That's exactly what Uber is.

Blogger CityBaby August 21, 2020 1:40 PM  

The problem is not lack of employee protection, the problem is that people are too ignorant about accounting, let alone economics, to figure out that they are getting a terrible deal driving for Uber and Lyft. There are other problems, as pointed out, but that's the main one.

Blogger Snidely Whiplash August 21, 2020 1:51 PM  

CityBaby wrote:t people are too ignorant about accounting, let alone economics, to figure out that they are getting a terrible deal driving for Uber and Lyft.
If your system is dependent on average people having a 120 IQ, you are doomed to failure.

Blogger KPKinSunnyPhiladelphia August 21, 2020 1:59 PM  

VD wrote:
AB5 may well be horrible law, but it was passed, at least in part, in response to Uber treating its contract-drivers very, very unfairly and trying to change the rules on them at will.

Arguably a teensy, eensy, weensy, little tiny part...but, sure, a part nonetheless.

Sometimes called, accurately but pejoratively, "optics."

Blogger Unknown August 21, 2020 2:58 PM  

Ken Prescott, well said.

Blogger map August 21, 2020 3:51 PM  

J.M. wrote:I'll say it, you are on your right to ban me if you so desire, here I go: Vox, as an economist, you should know very that's not the case at all, damn, in your own blog you have posted several times the reasons behind our collapse. And lower/stagnating wages is just a symptom of the disease, not the cause. Feminism, women labor and mass immigration have more to do with our decay...

JM, this is where you error lies. Feminism and mass immigration may be the cause of the decay, but you do not make it worse by allowing entities to feed on the decay...which is what uber/lyft do.

Blogger map August 21, 2020 3:52 PM  

Snidely Whiplash wrote:If your system is dependent on average people having a 120 IQ, you are doomed to failure.

Ain't that the truth. The economy should be a tool that anyone can use, not some rubiks cube for the few.

Blogger map August 21, 2020 4:00 PM  

ADS wrote:Ridesharing services did torpedo the crony capitalist practice of requiring licenses for taxis, artificially limiting the number of issues licenses, and benefitting from kickbacks from the wealthy interests that therefore monopolize taxi services.

The abusive nature of Uber et al isn't the gig nature of the work but the low rates and deceptive advertising that takes advantage of economically illiterate workers.


But Uber did this through blatant illegality. It is illegal to run a gypsy cab service or a jitney bus. In the past, if you decked out your car like a cab, then the cops would stop you and you'd get a ticket or be prosecuted. Uber allowed this illegality to be hidden in an app that is not readily visible to police. This is yet another way a business was allowed to develop by skirting the law.

Blogger Azure Amaranthine August 21, 2020 4:02 PM  

"If your system is dependent on average people having a 120 IQ, you are doomed to failure."

Or if the system is dependent on abusing everyone they can get a hold of with less than a 120 IQ....

Blogger map August 21, 2020 4:12 PM  

What is very suspicious about Uber and Lyft is that they lose billions of dollars every year, yet it is not clear where these losses are coming from. These are apps. It's software hosted on other people's equipment. The cars are provided by their contractors. Yet, uber bleeds billions of dollars in negative net income, EBITDA and free cash flow and still, somehow, has $14 billion in shareholder equity. What is driving these losses?

It is almost as if Uber is a pass-through entity for someone else. That someone is siphoning money from this company and is testing a business model that exploits an unenforceable law, against an industry with lots of foreigners and immigrants, namely, cab drivers. What is the purpose of such a rollout and what are they really targeting? Is this an attempt at undermining the trucking industry, since transports are a key indicator of economic growth?

Blogger Jack Amok August 21, 2020 4:24 PM  

But of course any company that might succeed against the corruption of mob-infested taxi licenses would itself have to be lawless enough to be prone to corruption itself.

The libertardian notion that "free enterprise" can subvert government corruption is nonsense, at least it is if you assume that free enterprise is noble and well-intended.

Blogger Unknown August 21, 2020 4:26 PM  

>"consent does not define morality"

Libertarian wickedness wrecked in five words.

Blogger ADS August 21, 2020 5:27 PM  

Oh noes, the retirement plans of people who banked on using an artificial scarcity to screw customers got disrupted. You get the same ditch where we'll bury the boomer machine gun owners who fight against NFA repeal so their pre-86 transferrables stay hideously overpriced.

Blogger ADS August 21, 2020 5:30 PM  

We're a post-law nation, if you haven't noticed. I shed no tears at lawbreaking that sidesteps asinine laws made for regulatory capture.

Blogger Emmanuel August 21, 2020 5:40 PM  

As I have gamma tendencies, I have to challenge your stuff about prostitutes : if western workers deserve a shot at decent job, western gammas/omegas also deserve a shot at intimacy.

Despite the above nitpicking, you hit the nail on the head with that one

Blogger Damelon Brinn August 21, 2020 6:55 PM  

The problem is not lack of employee protection, the problem is that people are too ignorant about accounting, let alone economics, to figure out that they are getting a terrible deal driving for Uber and Lyft.

True, but that's just wording it a different way. The truth is that most people don't have that ability, which is why we have those protections.

My first job off the farm was delivering pizza, using my own car. We got minimum wage, tips, and 18 cents a mile. None of us had any idea whether that 18 cents was really enough to cover the costs of maintaining and fueling our cars, most of which were older models that weren't exactly fuel-efficient. I had the math skills to do so, but not the experience to estimate how much wear and tear the job would put on my car. But I wanted the job so I took the deal.

I'm not rooting for employment regulations here. In general, I think we have too many. But letting corporations find a loophole around them all isn't the answer either, because most people just aren't capable of going toe-to-toe with a billion-dollar employer without getting screwed.

Blogger Newscaper312 August 21, 2020 7:27 PM  

As the late great Jerry Pournelle used to say, more or less, half our countrymen are below average intelligence and if we don't arrange things so they can be productive and reasonably self sufficient, what is conservatism conserving?

Blogger Newscaper312 August 21, 2020 7:29 PM  

Re Uber in general,it can be reasonable as a short term thing. After all you can't eat your car. But realize you're trading usable vehicle life for income even if can't model it.

Blogger pyrrhus August 21, 2020 7:37 PM  

I use Lyft a lot when I'm in California...most of the drivers thought that Lyft was profitable,and when I pointed out that Lyft was often cheaper than using my own car, which cost at least .70 per mile, they seemed surprised.

Blogger pyrrhus August 21, 2020 7:38 PM  

The drivers rely heavily on tips for their income, and some are quite personable and eager to please.

Blogger Korbin Ransley August 21, 2020 9:06 PM  

OT: Happy Dark lord Day 🙂

I intend to celebrate with reading and going over Vox related material 📚 🖥

Blogger J.M. August 21, 2020 9:19 PM  

VD wrote:I'll try to talk slower and spell everything out more carefully for you midwits next time.

But since some of you can't follow anything that isn't spelled out pedantically, in the interest of strict accuracy I should have written that "Lower wages are the inevitable consequence of the higher percentage of women entering the workforce, mass immigration, and trade deficits, which are three of the primary reasons your society is collapsing."

Only midwits don't understand shorthand.


I understood your statement and even quoted it. Anyway, others have explained the point better than I could.

map wrote:JM, this is where you error lies. Feminism and mass immigration may be the cause of the decay, but you do not make it worse by allowing entities to feed on the decay...which is what uber/lyft do.

You may be right. But my point was that lower wages in themselves are not the cause of decay as Vox seemingly implied in the comment I responded to, but I may be biased, I live in a country with artificially high wages where national workers have been made unattractive, partly because of these wages decreed "on behalf of the workers". Net result: Low entrepreneurship, companies have to either resort to illegal workers or embark in automation...end result: High levels of unemployment (exacerbated by Corona)and lower wages across the board in the informal sector.

Blogger Snidely Whiplash August 21, 2020 10:25 PM  

"You see it's not the subsidence or the rotted out structural members that is causing your building to collapse, it's the bad roofing."
Low wages are the proximate cause.
Feminism and corruption are the distal cause.
Rebellion against God is the final cause.
All three are causes. Objection to naming any of them as the cause of the destruction of our society on the basis that some other thing the "real" cause is literally retarded.
They are all the real cause, and you're an idiot.

Blogger map August 22, 2020 12:36 AM  

J.M. wrote:You may be right. But my point was that lower wages in themselves are not the cause of decay as Vox seemingly implied in the comment I responded to, but I may be biased, I live in a country with artificially high wages where national workers have been made unattractive, partly because of these wages decreed "on behalf of the workers". Net result: Low entrepreneurship, companies have to either resort to illegal workers or embark in automation...end result: High levels of unemployment (exacerbated by Corona)and lower wages across the board in the informal sector.

This is happening in your country because the government is deliberately pursuing a policy designed to under-utilize resources and people, to the point where such a policy actually threatens the stability of the family. When this happens, then there is a call for more and more socialism.

Blogger Snidely Whiplash August 22, 2020 1:14 AM  

So in your country's case, high wages are the mechanism.
You do understand that wages can be too high OR too low, right?

Blogger rikjames.313 August 22, 2020 5:55 AM  

From the legal side, which with corporations quickly becomes the only side as they try to screw everyone to the limit if the law...

There are many 'tests' for when someone is an employee. The guy you hire to cut the grass outside the plant twice a month with his own mower and trimmer isn't your employee.

So naturally Microsoft hired programmers to work on site on their systems under their supervision and pretended they were contractors just like the guy mowing the lawn outside.

Which led to the Microsoft test, which led to all the nonsense now with Indians and temp workers who can't use the food court...

But my point is a corporation will do anything it can to screw the people doing the work for them, so long as the money flows to the c suite clique and the ultra rich wasps and jews. They don't care about your country, your culture, your society, your kids, your god. Literally they will kill our future for an extra dollar so they can fly a citation X instead of a lear to take the kids to Hawaii.

Blogger Revelation Means Hope August 22, 2020 2:27 PM  

Not true, but the rules have really made it tough. As per usual, a good intentioned law swept up a lot of dirt, but also had many unintended consequences.

Blogger Azure Amaranthine August 22, 2020 3:53 PM  

"if western workers deserve a shot at decent job, western gammas/omegas also deserve a shot at intimacy."

Prostitutes and intimacy have less than nothing to do with each other. When one rises the other necessarily falls.

Blogger J.M. August 22, 2020 4:59 PM  

map wrote:This is happening in your country because the government is deliberately pursuing a policy designed to under-utilize resources and people, to the point where such a policy actually threatens the stability of the family. When this happens, then there is a call for more and more socialism.

Indeed, however it was more the result of demogoguery from an already socialist leaning government than a laid out plan but who knows. Since such a leaning is shared by the political parties across the spectrum, the result has been regular minimum wage increases and more regulations like the one mentioned here (in my country Uber has been almost expelled). When things turn as expected...more calls for socialism. In my country we have experience with many laws similar to the one from California.

Blogger Revelation Means Hope August 22, 2020 9:22 PM  

Or they haven't paid attention to whom almost all of the "full time" drivers are and why they all speak poor english.

Blogger Pathfinderlight August 22, 2020 9:28 PM  

I disagree. Many on the religious right are waking up to the fact that the left now puppets most corporations. We tolerated them as long as they brought in money and at least tried to be helpful by donating money to charitable causes. Now that they're actively attacking the nation by supporting immigration JUST so they can turn workers into serfs, those companies are eating away at the tolerance of the American people.

Blogger John Rockwell August 22, 2020 11:03 PM  

VD wrote:I'll say it, you are on your right to ban me if you so desire, here I go: Vox, as an economist, you should know very that's not the case at all, damn, in your own blog you have posted several times the reasons behind our collapse. And lower/stagnating wages is just a symptom of the disease, not the cause. Feminism, women labor and mass immigration have more to do with our decay.

I'll try to talk slower and spell everything out more carefully for you midwits next time.

But since some of you can't follow anything that isn't spelled out pedantically, in the interest of strict accuracy I should have written that "Lower wages are the inevitable consequence of the higher percentage of women entering the workforce, mass immigration, and trade deficits, which are three of the primary reasons your society is collapsing."

Only midwits don't understand shorthand.


Midwits. Smart and dumb enough to be fooled by smart sounding stupidity.

Blogger John Rockwell August 22, 2020 11:05 PM  

Corporations also reward their CEO's even as their company is failing with 10-100 Millions of "Compensation"

Golden Parachutes ahoy for failure. Rewarding Parasites.

Blogger Snidely Whiplash August 22, 2020 11:29 PM  

John Rockwell wrote:Corporations also reward their CEO's even as their company is failing with 10-100 Millions of "Compensation"
Take the case of Briggs and Stratton. With a $6 million interest payment coming up, the board voted to skip the payment and instead give out $5 million in bonuses and incentive payments to their executives, throwing the company into full-on bankruptcy.

Two guesses as to the ethnicity of the CEO.

Blogger Jack Amok August 23, 2020 2:11 AM  

Take the case of Briggs and Stratton. With a $6 million interest payment coming up, the board voted to skip the payment and instead give out $5 million in bonuses and incentive payments to their executives, throwing the company into full-on bankruptcy.

If the courts were reliable, those bonuses would be clawed back by the bankruptcy court. I'm not holding my breath.

Two guesses as to the ethnicity of the CEO.

Well, I'm going to go out on a limb and say the CEO isn't a prominent Trump supporter or the SDNY prosecutor would have already had him arrested in a no-knock raid with CNN on hand to film him being hauled away in his pajamas.

Blogger Akulkis August 23, 2020 8:08 AM  

>> Ngrams tells us that until 1880, capitalism was not a word in common use. It's used roughly 1,000 times more commonly today than in 1880.

I'm starting to believe the story that capitalism is nothing more than a strawman Marx set up to make his communism look good.

I've only written that in commens to this blog about a half a dozen times. It's about time you believed me.

Blogger Akulkis August 23, 2020 8:24 AM  

>> But Uber did this through blatant illegality. It is illegal to run a gypsy cab service or a jitney bus. In the past, if you decked out your car like a cab, then the cops would stop you and you'd get a ticket or be prosecuted. Uber allowed this illegality to be hidden in an app that is not readily visible to police. This is yet another way a business was allowed to develop by skirting the law.

Those laws were never demanded by the public in the first place, only the cab owners, for the purpose of creating an artificial scarcity, and therefore creating a strict oligopy of "legal" cabs.

Blogger Akulkis August 23, 2020 8:28 AM  

>> What is the purpose of such a rollout and what are they really targeting? Is this an attempt at undermining the trucking industry, since transports are a key indicator of economic growth?

Trucking isn't a key indicator of economic growth because truckers are getting paid -- Trucking is a key indicator of economic growth because the supply chain demands the movement of raw materials, components, assemblies, and finished goods through the supply chains. The more demand for such, the more trucking their is.

Blogger Akulkis August 23, 2020 8:38 AM  

>> "if western workers deserve a shot at decent job, western gammas/omegas also deserve a shot at intimacy."

> Prostitutes and intimacy have less than nothing to do with each other. When one rises the other necessarily falls.

That is a really short-sighted analysis.

When wives have a credible threat of their husbands spending household money on prostitutes, their treatment, and intimacy with their husbands increases.

What really kills intimacy is when wives think that they can abuse their husbands, and that they just have to take it, with no recourse AND she still gets to keep the money, too.

When wives have credible competition, they maintain intimacy, not only to keep their husband's affections, but ALSO to keep their men's paychecks entirely for the benefit of the household.

Blogger Pathfinderlight August 23, 2020 10:09 PM  

It's not just the taxi license. It's the automobile with special equipment, regular ridership, and reputation with your customer base.

As a former small gov tradcon myself, I wouldn't mind local and state government taxing Uber to make sure their drivers make minimum wage plus federal standard mileage.

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