#i used to be a gig economy driver at a company that was sued for paying less than minimum wage after expenses
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mutualmango · 8 months ago
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every time doordash discourse re-emerges it gets lazier and more stupid and its proponents more self-infantilizing. the incredible excuses people come up with to defend the luxury of having their treats delivered at a tremendous premium, almost none of which ends up in the hands of the heavily exploited worker
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covid19worldnews · 4 years ago
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Proposition 22 Passes, but Uber and Lyft Are Only Delaying the Inevitable
On Tuesday night, Californians voted to pass Proposition 22, a ballot measure supported by app-based gig companies that exempts them from reclassifying their workers as employees.
Companies including Uber, Lyft, Instacart, Postmates, and more, spent big to convince voters to approve the measure. The company-funded Yes on Proposition 22 campaign spent over $200 million (including millions in donations to the California GOP), deployed a record number of lobbyists, and spread waves of misleading political mailers. At the same time, Uber’s and Lyft’s chief executives undertook a media tour featuring threats to exit the state and repeatedly attempted to exempt themselves in California’s courts. The campaign bought  digital, television, radio, and billboard ads, and also sponsored academic research Meanwhile, delivery drivers were forced to use Yes on Proposition 22-branded packaging while the apps themselves told users to vote yes. 
On the other side of the issue was a grassroots campaign run by driver advocacy groups and organized labor, which spent just over $20 million. 
“We’re disappointed in tonight’s outcome, especially because this campaign’s success is based on lies and fear-mongering. Companies shouldn’t be able to buy elections,” Gig Workers Rising, a California-based driver advocacy group said in a press release early Wednesday morning. “But we’re still dedicated to our cause and ready to continue our fight. Gig work is real work, and gigi workers deserve fair and transparent pay, along with proper labor protections.”
As news of the results broke, Uber CEO Dara Khosrowshahi took to Twitter to show his excitement and shared a tweet from early Uber investor Jason Calacanis calling Assemblywoman Lorena S Gonzalez, the author of AB5, a “grifter” who “failed to hand gig workers over to big-money unions”.
After some time, Khosrowshahi reversed the retweet and instead emailed drivers a more subdued message celebrating that the “future of independent work is more secure because so many drivers like you spoke up and made your voice heard—and voters across the state listened.”
This is undoubtedly a victory for capital over labor, and one that will likely allow the unprofitable gig economy to continue limping along at the expense of workers. It does not, however, change the reality that the “gig” business model is doomed in the long-term.
For years, gig companies have misclassified employees as independent contractors—a legal distinction that has allowed unprofitable enterprises to avoid expensive labor costs such as a minimum wage, health insurance, and safe working conditions, among other benefits of employment. Proposition 22 was cooked up to undo Assembly Bill 5 (AB5), a California law that codified an “ABC test” to determine if a worker was independently contracted or employed by a company and which went into effect in January.
After AB5 went into effect, attorneys for some of California’s largest cities, along with the state’s attorney general, then filed suits demanding an end to app-based gig company worker misclassification. Uber and Lyft have waged the main legal battle, but lost the case and every appeal since, making Proposition 22 a make-or-break measure.
“Prop 22 means I get no workers’ compensation, no disability, no sick pay, it would be touch and go for me,” Mekela Edwards, an Oakland-based Uber driver who hasn’t worked since March because COVID-19 poses a high health risk to her. “I have to ask how long my unemployment will last, how long I’ll have before I’m forced to go back out there and work. I don’t want to imagine it, I can’t imagine being forced to choose between my health and making a living.”
Hundreds of thousands of people work for the gig companies behind Proposition 22 and many have been devastated by the COVID-19 recession. Still, this has not stopped the gig companies from threatening to take drastic measures if they’re not allowed to have their way. Over the past few months, Uber and Lyft in particular have threatened to radically downsize where service is offered, fire most of their drivers, radically restructure into a franchise model, or leave the state entirely, if Proposition 22 fails.
California voting Yes on Prop 22—which includes fine print that any changes to it must be passed with a seven-eighths majority in the state’s legislature—is a huge setback for labor. It will trap hundreds of thousands of workers under a permanent misclassification scheme that rewards a racist business model that disproportionately hurts Black and brown workers. Despite all this, Proposition 22 is not the final say on this matter in the U.S. or internationally.
AB5 clones are being considered in New York and New Jersey, while Massachusetts’ Attorney General has already sued Uber and Lyft to reclassify drivers in the state. Despite objections from Uber’s and Lyft’s impressive lobbying operations, the PRO Act—which would grant gig workers the right to collectively bargain, as part of a massive overhaul of labor law—has passed in the House.
“This is really a story about the kind of cities we are building,” Katie Wells, a researcher at Georgetown University told Motherboard. “The kind of cities—the kind of world we’ve built—it has allowed these entities to come in and build up a workforce through an extractive and predatory system. Regulators have to keep that in mind.”
Outside of the U.S., the global 2019 strike on the day of Uber’s public offering has been followed by successive waves. Over the summer, thousands of delivery workers organized militant strikes and protests in Brazil, Mexico, Chile, Argentina, and Ecuador targeting Uber Eats and other exploitative food delivery apps. These have been joined by even more strikes and protests in Nigeria, France, and India. At the same time, Uber is losing legal challenges in France, Britain, Canada, Italy, where high courts have either outright ruled Uber drivers are employees or have opened the door to lawsuits reclassifying them as such.
Governments across the world are also beginning to push Uber to pay billions in taxes that it has evaded over the past decade. In Britain, Uber will have to pay £1.5 billion ($1.9 billion) in unpaid value-added taxes it avoided by exploiting a legal loophole. In the U.S., Uber has dodged billions in taxes and wage claims through misclassification: in New Jersey it owes over $650 million in taxes, while in California drivers have filed $1.3 billion in wage claims against Uber and Lyft.
Since Uber’s only hope for survival lies in misclassifying workers and labor law, though, it won’t give up the billions to be made both domestically and globally (even if at a loss) without a fight. 
“There’s a lesson here for workers of all sectors, beyond classification: companies are willing to spend massive amounts of money to take away their rights,” said Jerome Gage, a Lyft driver and organizer with Mobile Workers Alliance. “It’s incredibly important for workers to organize to protect themselves, to protect upward mobility, a minimum wage, sick leave, healthcare—to roll back a century of basic protections that try and keep Americans out of poverty.”
Proposition 22’s victory, however, can’t obscure the fact that these companies are doomed. Even with a wage guarantee that effectively pays $5.64 an hour, the companies are no closer to sustainably achieving profitability than they were yesterday. Overcrowded markets for ride-hailing and food delivery, along with vicious price wars and poor unit economics meant there was never any real hope of achieving a monopoly, erecting barriers to market entry, and raising prices to levels that, for many of these companies, would yield their first ever profits. 
There’s good news for investors, however, who will finally begin to see returns on investments that have long been underwater thanks to massively inflated valuations that have tumbled in public markets. Indeed, share prices for Uber and Lyft soared in premarket trading on Wednesday morning. 
For workers, though, things will be bad. It is hard to imagine how hundreds of thousands of workers earning wages just under half of the minimum wage will be able to feed themselves, maintain housing, afford medical care, or otherwise make ends meet, especially under the boot of a pandemic and with no hope of government aid until next year.
Localities, cities, states, and countries will have to begin cooperating if they’re to have any hope of weathering the storm. They’ll need to start being aggressive, experimenting with ways they can outright take over the platforms or prohibit companies from providing the service to begin with—all while figuring out ways to expand mass transit so that not only they’re not only meeting the needs of people who need transportation, both those who worked for app-based ride-hail companies previously.
For the sake of maintaining an illusion that they’ll one day be profitable, gig companies have waged war in California at great expense to their workers, the public, and employees in other industries whose employers may grow emboldened this moment. The fight is far from over, and there is hope for labor in the continuing coordination of driver advocates, regulators, and legislators around the world, but it will get messy as likely to harken a period of unprecedented social unrest among increasingly immiserated gig workers.
“Beyond California, we need to strike early and strike quickly to ensure swift defeat to this idea that you can change the basic nature of employment and deny benefits to your employees,” Gage told Motherboard. “I ask people not involved to try and understand the labor movement in your area. Reach out to unions and ask how you can help volunteers…Get involved with and spread the world—[money] can buy misinformation and it can deceive, but it can’t beat the solidarity between two workers or between human beings.”
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https://www.covid19snews.com/2020/11/04/proposition-22-passes-but-uber-and-lyft-are-only-delaying-the-inevitable/
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californiaprelawland · 4 years ago
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Independent Contractor Or Employee? Uber & Lyft, Inc. Try To Bypass The Courts
By Marshall Comia, University Of California Davis Class of 2021
October 12, 2020
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In the upcoming general elections, California voters will have to decide whether or not to pass what has become the most expensive ballot measure in California history, Proposition 22.[i] This proposition would alter the criteria that determines what classifies an employee from an independent contractor.[ii]More specifically, this proposition will determine whether or not “app-based rideshare and delivery companies[, such as Uber, Lyft, Instacart, and Doordash,] can hire drivers as independent contractors.”[iii]Distinguishing between these two worker classifications are important for a company because unlike employees, independent contractors don’t receive standard benefits and protections from their company; these include, among others, health care benefits, unemployment insurance, and workers’ compensation. By taking this expensive legal fight to the ballot box, these app-based companies are trying to bypass the courts.
In 2019, Assembly Bill 5 (A.B. 5) was passed through the California legislature and signed into law. This bill effectively mandated that app-based rideshare and delivery companies classify their workersas employees instead of independent contractors, aswell as treat these workers appropriate to their new classification. A.B. 5 does this by codifying the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) (Dynamex). In the Dynamex decision, the “ABC” test, which is “utilized in other [California] jurisdictions in a variety of contexts to distinguish employees from independent contractors,”[iv]was used again to make the worker distinction. Under the ABC test, a worker is considered an independent contractor and not an employee if “the hiring entity establishes:
“(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
“(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
“(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”[v]
If any one of the three criteria cannot be adequately established by the hiring entity, then the hiring entity can’t classify the worker as an independent contractor; they have to classify the worker as an employee. In a case where a court rules that the ABC test can’t be applied, A.B. 5 says that the test from the case S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989)(Borello) that determines employee or independent contractor status should instead be used. The Borello test weighs a myriad of interrelated factors that can be weighed differently to principally decide “whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.”[vi]Despite the passage of A.B. 5, Uber and Lyft Inc. aren’t following it.
In May 2020, Uber and Lyft Inc. were sued by the Attorney General of California for continuing to violate A.B. 5 after it took effect January 1, 2020, by “misclassify[ying] their ride-hailing drivers as independent contractors rather than employees” in the case People v. Uber et al (Uber et al.).[vii] The People also tried a motion “for a preliminary injunction enjoining Defendants from classifying their drivers as independent contractors;”[viii] meaning that the court would order Uber and Lyft to immediately comply with A.B. 5 unless another court says otherwise. In this California Superior Court decision, Judge Ethan Schulman ruled that Uber and Lyft Inc. misclassified their workers as independent contractors and should be classifying their workers as employees because defendants Uber and Lyft, Inc. fail the B prong of the ABC test established in Dynamax (“that the worker performs work that is outside the usual course of the hiring entity’s business.”).[ix]Uber tried to argue that their companyis a technology company rather than a transportation company, that “operate[s] as ‘matchmakers’ to facilitate transactions between drivers and passengers”[x] and their actual employees are the tech workers who do the “engineering, product development, marketing and operations ‘in order to improve the properties of the app.’”[xi]Therefore, Uber tried to make the case that Uber drivers are “outside the usual course” of the work that Uber employees do. Uber’s shot down argument was seen by the courts as a “classic example of circular reasoning: because it regards itself as a technology company and considers only tech workers to be its ‘employees,’ anybody else is outside the ordinary course of its business, and therefore is not an employee.”[xii] Uber has made this argument beforein the case O’Connor v. Uber Technologies, Inc. (2015). In this case, “Judge Edward Chen of the U.S District Court for the Northern District of California found this argument ‘flawed in numerous respects’…‘fundamentally, it is obvious drivers perform a service for Uber because Uber simply would not be a viable business without its drivers.’”[xiii]As opined, the decision in Uber et al. to classify Uber and Lyft, Inc. drivers as employees has been seen in many other court conclusions, such as Cunningham v. Lyft, Inc. (2020), Namisnak v. Uber (2020), and Crawford v. Uber Technologies, Inc. (2018).[xiv]
The defendants of Uber et al. also made two other main arguments to defend their evasion from complying with A.B. 5. Defendants first argued that A.B. 5 doesn’t apply to them at all “because they are not ‘hiring entities’ within the meaning of the legislation.”[xv] The court noted that in a previous case, Uber argued that “AB 5 targets gig economy companies and workers and treats them differently from similarly situated group,”[xvi] yet in Uber et al., Uber was trying to argue that the same piece of legislation that unfairly targeted them didn’t apply to them at all. The court decided that they couldn’t “take seriously such contradictory positions”[xvii] and ruled the defendants as subject to A.B. 5.
The second main argument that defendants made was that if they reclassified their drivers as employees in compliance with A.B. 5, they would suffer “two categories of harm: (1) the costs and other harms associated with the restructuring of Defendants’ businesses in California; and (2) the harms to Defendants’ drivers, including the risk that some may [be] unable to continue earning income if Defendants do not offer them continued work as employees, and the risk that their reclassification as employees jeopardize their eligibility for emergency federal benefits available to them as self-employed workers during the COVID-19 pandemic.”[xviii] In response to the first category of harm, the court acknowledged that the compliance to A.B. 5 will be costly because defendants “will have to change the nature of their business[es] in significant ways.”[xix] But, the court points out that defendants’ argument “at root, is fundamentally one about the financial costs of compliance.”[xx]
In response to the second category of harm, the court opined that if compliance to the People’s demands of A.B. 5 were far-reaching,
“they have only been exacerbated by Defendants’ prolonged and brazen refusal to comply with California law. Defendants may not evade legislative mandates merely because their businesses are so large that they affect the lives of many thousands of people.”[xxi]
The court points out that since Defendants’ ridership is currently lower than it’s ever been, now “may be the best time (or the least worst time) for Defendants to change their business practices to conform to California law without causing widespread adverse effects on their drivers.”[xxii]Overall, the Defendants are trying to drag out litigation until after the November 2020 election, where Uber and Lyft can become exempt from A.B. 5’s requirements through the passage of Proposition 22. Despite the motions that Defendants have made attempting “to delay or avoid a determination whether, as the People allege, they are engaged in an ongoing and widespread violation of A.B. 5…Defendants are not entitled to an indefinite postponement of their day of reckoning. Their threshold motions are groundless.”[xxiii] The court ordered that defendants are “restrained from classifying their Drivers as independent contractors.”[xxiv]
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[xxv]
The contributors supporting Proposition 22 have raised over $184 million, with Lyft, Inc. and Uber as the top two contributors.[xxvi] The contributors opposing Proposition 22 have only raised around $7.5 million. In a Berkeley IGS Poll of likely voters, 39% would vote yes to Proposition 22, 36% would vote no, and 25% are undecided.[xxvii] As shown by the Proposition’s tight poll numbers, the fight for whether app-based rideshare and delivery companies will classify their workers as independent contractors or employees is going to be a close one.
________________________________________________________________
[i]“What Were the Most Expensive Ballot Measures in California.” Ballotpedia. Lucy Burns Institute. Accessed September 29, 2020. https://ballotpedia.org/What_were_the_most_expensive_ballot_measures_in_California.
[ii]“Qualified Statewide Ballot Measures.” Qualified Statewide Ballot Measures :: California Secretary of State. California Secretary of State. Accessed September 29, 2020. https://www.sos.ca.gov/elections/ballot-measures/qualified-ballot-measures.
[iii]“Proposition 22 [Ballot].” Legislative Analyst's Office. Joint Legislative Budget Committee (JLBC). Accessed September 29, 2020. https://lao.ca.gov/BallotAnalysis/Proposition?number=22&year=2020.
[iv]Dynamex Operations W. v. Superior Court and Charles Lee, Real Party in Interest,4 Cal.5th 903, 416 P.3d 1, 232 Cal.Rptr.3d 1 (2018).https://boehm-associates.com/wp-content/uploads/2018/10/Dynamex-Operations-West_-Inc.-v.-Superior-Court_-4-Cal.pdf
[v]Id.
[vi]S. G. Borello & Sons, Inc. v. Department of Industrial Relations 48 Cal.3d 341 (1989).
[vii]People of the State of California v. Uber Technologies, Inc., A Delaware Corporation et al. https://assets.documentcloud.org/documents/7032764/Judge-Ethan-Schulman-Order-on-Lyft-and-Uber.pdf.
[viii]Id at 2.
[ix]Dynamax, 4 Cal.5th at 908
[x]People of the State of California v. Uber Technologies, Inc., A Delaware Corporation et al.https://assets.documentcloud.org/documents/7032764/Judge-Ethan-Schulman-Order-on-Lyft-and-Uber.pdf
[xi]Id.
[xii]Id.
[xiii]Id.
[xiv]Id.
[xv]Id.
[xvi]Lydia Olson et al v. State of California et al, 2:19-cv-10956, No. 52 (C.D.Cal. Feb. 10, 2020) (available at https://www.docketalarm.com/cases/California_Central_District_Court/2--19-cv-10956/Lydia_Olson_et_al_v._State_of_California_et_al/52/)
[xvii]Id.
[xviii]Id.
[xix]Id.
[xx]Id.
[xxi]Id.
[xxii]Id.
[xxiii]Id.
[xxiv]Id.
[xxv]“What Were the Most Expensive Ballot Measures in California.” Ballotpedia. Lucy Burns Institute. Accessed September 29, 2020. https://ballotpedia.org/What_were_the_most_expensive_ballot_measures_in_California.
[xxvi]“November 2020 General Election.” California Fair Political Practices Commission. Accessed September 29, 2020. http://www.fppc.ca.gov/transparency/top-contributors/nov-20-gen.html.
[xxvii]DiCamillo, M. (2020). Tabulations from a Mid-September 2020 Survey of California Likely Voters about Four of the Propositions on the November 2020 Statewide Election Ballot. UC Berkeley: Institute of Governmental Studies. Retrieved from https://escholarship.org/uc/item/1p22n9ws.
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gracieyvonnehunter · 5 years ago
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DoorDash and Uber Eats aren’t collecting sales tax on delivery fees in some states. That could be a problem.
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Discrepancies between the sales tax practices of companies like DoorDash, as well as its competitors like Uber Eats, Postmates, and Grubhub are raising questions | Getty
It could be the latest business practice in the gig economy to raise regulatory questions.
The food delivery company Grubhub said it has collected hundreds of millions in taxes for delivery and service fees in dozens of states since at least 2011. But Recode has found that in some of those same states, Grubhub’s top rivals in the delivery space, including DoorDash, Postmates, and Uber Eats, don’t appear to be collecting a cent. This discrepancy puts those rivals in a precarious position if regulators take notice and object.
Several tax experts Recode interviewed said food delivery app companies’ tax practices could raise legal concerns. The sales taxes in question are on fees that can amount to as much as a third of the total price of food orders — or at least $120 million per year of taxable dollars on the sales of major food delivery companies in California and New York alone, based on Recode’s calculations on an estimated market size from research firm Forrester. If you account for all of the US, that could amount to hundreds of millions of dollars per year.
The experts told Recode these tax practices could be a liability not just for the food delivery apps but also for the restaurants whose food they deliver. Both the apps and the restaurants could later be on the hook for paying taxes that apps aren’t currently collecting. It’s another example of how existing laws haven’t yet adapted to the gig economy — and in the meantime, these tech companies are taking advantage of the loopholes.
“I would feel very uncomfortable if I were tax counsel for one of those companies if those taxes weren’t being collected,” said Hayes Holderness, assistant professor at the University of Richmond School of Law and a state tax policy expert. Holderness called it an “aggressive” and “risky” decision for companies not to charge sales taxes on delivery — but a “not necessarily unreasonable” stance, and one that could be debated in court. For companies in the competitive food delivery market, the immediate business benefit of keeping sales taxes lower could also outweigh the legal risks, he said.
Gig economy companies have historically loosely interpreted the law — or in some cases skirted it entirely — to benefit their business models, and regulators are increasingly examining their behavior.
The Washington, DC, attorney general announced earlier this week he’s suing DoorDash, arguing that the company misled customers and pocketed workers’ tips. Earlier this year, politicians raised concerns about wage theft when Instacart, DoorDash, Uber Eats, and several other companies were found to be using workers’ tips to subsidize their own costs (the companies all eventually revised their policies — with DoorDash being the slowest to do so — and many workers continue to report low pay). In September, Uber made a baffling argument that its drivers aren’t core to its business as part of its rationale for why a new labor law targeted at gig economy apps didn’t actually apply to the company. And ride-hail companies have similarly been accused of not doing enough to prevent and investigate sexual assaults that occur during rides.
In every case, gig economy companies have argued that they are digital marketplaces matching sellers and buyers and are therefore not financially or legally responsible for things that happen on their platforms.
When it comes to sales tax, companies have an obvious business incentive to avoid charging it: keep prices low, keep customers happy, and keep sales up. And in the food delivery space, which is an increasingly competitive industry with tight margins, that’s an acute pressure.
“Right now there’s an arms race for customer acquisition,” said Sucharita Kodali, a principal analyst at Forrester who specializes in e-commerce. “As venture capital startups, the more growth they can exhibit, that’s still the signal of success, and any lever they can use to help showcase those metrics helps.”
In the past year, DoorDash has emerged as the unexpected market leader and fastest-growing food delivery app in the US, according to research firm Edison Trends, unseating market incumbent Grubhub. The company has aggressively expanded its business, putting pressure on an already crowded market.
If tax laws were more clear, food delivery companies would probably just absorb the cost of charging sales taxes on delivery fees and “move on,” Kodali told Recode. But, Kodali said, in “an age of ambiguity, if it helps them to showcase a better result then why not?”
But it also poses a risk. If states or cities find companies liable for taxes later, they could sue for years of back taxes, several tax experts told Recode. That’s what happened to travel website Expedia, which several cities accused of avoiding as much as $847 million in taxes on room fees. The company has long been embroiled in legal battles over these cases. More recently, the state of New Jersey recently sued Uber for over $650 million in unemployment and disability insurance taxes for allegedly misclassifying its workforce as independent contractors instead of employees.
Laws haven’t caught up with the gig economy
The tax codes governing food delivery apps like Grubhub, DoorDash, and Postmates vary significantly state by state, and they are changing as local governments grapple with how to adapt old laws to the new gig economy.
Generally, some laws in states like California and New York have provisions that could call for sales taxes on delivery and service fees to be collected, according to Scott Groberski, a managing director in state and local tax groups at accounting and tax firm Grant Thornton. Still, it’s very much a gray area and would vary based on the specifics of the contracts between restaurants and food delivery providers.
“With new technology, it’s extremely complicated determining what’s taxable and what’s not — I think this is something that continues to evolve even as we speak,” Groberski told Recode.
In California, for example, it depends if the company contracts with restaurants to “provide a delivery service only” or if it acts as a “retailer” of the food, according to Casey Wells at the California Department of Tax and Fee Administration.
Whether or not a food delivery app company is a retailer depends on the contracts it has with restaurants, Wells said, as well as if the app is marking up the price the restaurant normally charges for the food.
Wells declined to comment on whether or not the law would classify specific companies like DoorDash or Grubhub as retailers or not.
Some tax experts said it comes down to whether these companies are charging the restaurants they work with or only charging consumers. Grubhub, DoorDash, Uber Eats, and Postmates all regularly partner with restaurants and charge them commission fees.
“I have a real doubt that Grubhub is overtaxing — the default rule should be that it’s taxable, that is the safer position,” said Holderness.
“In some cases, it may not be a question of tax avoidance or uncertainty so much as legitimate uncertainty about what the rules are,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center. Policies vary state to state, and the rules around taxing delivery fees are myriad and often outdated.
When asked about concerns tax experts raised about Uber’s sales and delivery tax policies, a spokesperson for Uber responded with the following statement:
“We collect sales tax on delivery fees where required, with particular attention to recently enacted marketplace facilitator laws. Although California has enacted similar legislation, there is an exception for delivery network companies. Accordingly, we do not believe it is appropriate for Uber Eats to collect sales tax on delivery fees from our users in California at this time. We are deeply committed to compliance, which includes ongoing assessment of developments in local legislation and state-issued guidance.”
DoorDash (which also owns Caviar) declined to comment.
In a statement to Recode, Postmates said it is in compliance with all regulations and tax laws in jurisdictions where it operates, and that it is “[w]orking with lawmakers across markets, both to ensure our operations remain consistent with evolving state-by-state guidance on the tax code, and to balance the unique nature of on-demand products with the goal of ensuring taxable revenues are always collected by the state.”
Grubhub, meanwhile, maintains that it’s in the right for collecting these sales taxes and denied that the food delivery app business models exempt companies from these collections.
“We have been audited by multiple states, multiple times, and in every case we were required to collect and remit sales tax on delivery fees,” said Grubhub’s CEO Matt Maloney.
The threat of regulation
In recent years, local lawmakers have increasingly scrutinized the tech industry. For example, more states are now charging sales tax on products that are purchased online. That’s because of a June 2018 Supreme Court Ruling, South Dakota v. Wayfair, which gave states the rights to demand more tax revenue from online companies that sell goods in their state, even if those companies don’t have a physical location in the area.
California politicians told Recode that they’re also thinking about how the gig economy collects taxes.
“I’m concerned about what appears to be a pattern of activity of these gig companies to not even find out what they should be doing by law,” said California Assemblywoman Lorena Gonzalez, who authored the landmark labor legislation AB 5 that legally pressures companies like Uber and Lyft to reclassify contractors as employees. “It’s unfair competition. If you have a Dominos, for example, that is abiding by the rules, they’re taking the appropriate sales tax out, they’re not going to be able to compete with an app that’s doing all those things.” Dominos is one of the only major pizza chains that does its own delivery, independent of food delivery apps.
If there’s a lesson to be learned by food delivery startups from tech successes of the past, it’s that creatively interpreting outdated regulations can help them get ahead. Amazon largely skipped out on collecting sales tax for third-party seller products until a few years ago when it was facing state regulations to do so — but by then it was already the top online retailer. Uber ignored licensing rules in many states but became the leading ride-hail company in the meantime. And Airbnb delayed its obligation to collect taxes and enforce zoning rules by suing several cities where it operated.
In all those fights, regulators were slow to keep up with tech companies, which took advantage of that to quickly become market leaders, meaning they could afford costly legal battles. But in an era when tech is facing a reckoning with the public and increased political scrutiny, that might change, and regulators may start applying stricter rules to companies like DoorDash and Postmates.
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shanedakotamuir · 5 years ago
Text
DoorDash and Uber Eats aren’t collecting sales tax on delivery fees in some states. That could be a problem.
Tumblr media
Discrepancies between the sales tax practices of companies like DoorDash, as well as its competitors like Uber Eats, Postmates, and Grubhub are raising questions | Getty
It could be the latest business practice in the gig economy to raise regulatory questions.
The food delivery company Grubhub said it has collected hundreds of millions in taxes for delivery and service fees in dozens of states since at least 2011. But Recode has found that in some of those same states, Grubhub’s top rivals in the delivery space, including DoorDash, Postmates, and Uber Eats, don’t appear to be collecting a cent. This discrepancy puts those rivals in a precarious position if regulators take notice and object.
Several tax experts Recode interviewed said food delivery app companies’ tax practices could raise legal concerns. The sales taxes in question are on fees that can amount to as much as a third of the total price of food orders — or at least $120 million per year of taxable dollars on the sales of major food delivery companies in California and New York alone, based on Recode’s calculations on an estimated market size from research firm Forrester. If you account for all of the US, that could amount to hundreds of millions of dollars per year.
The experts told Recode these tax practices could be a liability not just for the food delivery apps but also for the restaurants whose food they deliver. Both the apps and the restaurants could later be on the hook for paying taxes that apps aren’t currently collecting. It’s another example of how existing laws haven’t yet adapted to the gig economy — and in the meantime, these tech companies are taking advantage of the loopholes.
“I would feel very uncomfortable if I were tax counsel for one of those companies if those taxes weren’t being collected,” said Hayes Holderness, assistant professor at the University of Richmond School of Law and a state tax policy expert. Holderness called it an “aggressive” and “risky” decision for companies not to charge sales taxes on delivery — but a “not necessarily unreasonable” stance, and one that could be debated in court. For companies in the competitive food delivery market, the immediate business benefit of keeping sales taxes lower could also outweigh the legal risks, he said.
Gig economy companies have historically loosely interpreted the law — or in some cases skirted it entirely — to benefit their business models, and regulators are increasingly examining their behavior.
The Washington, DC, attorney general announced earlier this week he’s suing DoorDash, arguing that the company misled customers and pocketed workers’ tips. Earlier this year, politicians raised concerns about wage theft when Instacart, DoorDash, Uber Eats, and several other companies were found to be using workers’ tips to subsidize their own costs (the companies all eventually revised their policies — with DoorDash being the slowest to do so — and many workers continue to report low pay). In September, Uber made a baffling argument that its drivers aren’t core to its business as part of its rationale for why a new labor law targeted at gig economy apps didn’t actually apply to the company. And ride-hail companies have similarly been accused of not doing enough to prevent and investigate sexual assaults that occur during rides.
In every case, gig economy companies have argued that they are digital marketplaces matching sellers and buyers and are therefore not financially or legally responsible for things that happen on their platforms.
When it comes to sales tax, companies have an obvious business incentive to avoid charging it: keep prices low, keep customers happy, and keep sales up. And in the food delivery space, which is an increasingly competitive industry with tight margins, that’s an acute pressure.
“Right now there’s an arms race for customer acquisition,” said Sucharita Kodali, a principal analyst at Forrester who specializes in e-commerce. “As venture capital startups, the more growth they can exhibit, that’s still the signal of success, and any lever they can use to help showcase those metrics helps.”
In the past year, DoorDash has emerged as the unexpected market leader and fastest-growing food delivery app in the US, according to research firm Edison Trends, unseating market incumbent Grubhub. The company has aggressively expanded its business, putting pressure on an already crowded market.
If tax laws were more clear, food delivery companies would probably just absorb the cost of charging sales taxes on delivery fees and “move on,” Kodali told Recode. But, Kodali said, in “an age of ambiguity, if it helps them to showcase a better result then why not?”
But it also poses a risk. If states or cities find companies liable for taxes later, they could sue for years of back taxes, several tax experts told Recode. That’s what happened to travel website Expedia, which several cities accused of avoiding as much as $847 million in taxes on room fees. The company has long been embroiled in legal battles over these cases. More recently, the state of New Jersey recently sued Uber for over $650 million in unemployment and disability insurance taxes for allegedly misclassifying its workforce as independent contractors instead of employees.
Laws haven’t caught up with the gig economy
The tax codes governing food delivery apps like Grubhub, DoorDash, and Postmates vary significantly state by state, and they are changing as local governments grapple with how to adapt old laws to the new gig economy.
Generally, some laws in states like California and New York have provisions that could call for sales taxes on delivery and service fees to be collected, according to Scott Groberski, a managing director in state and local tax groups at accounting and tax firm Grant Thornton. Still, it’s very much a gray area and would vary based on the specifics of the contracts between restaurants and food delivery providers.
“With new technology, it’s extremely complicated determining what’s taxable and what’s not — I think this is something that continues to evolve even as we speak,” Groberski told Recode.
In California, for example, it depends if the company contracts with restaurants to “provide a delivery service only” or if it acts as a “retailer” of the food, according to Casey Wells at the California Department of Tax and Fee Administration.
Whether or not a food delivery app company is a retailer depends on the contracts it has with restaurants, Wells said, as well as if the app is marking up the price the restaurant normally charges for the food.
Wells declined to comment on whether or not the law would classify specific companies like DoorDash or Grubhub as retailers or not.
Some tax experts said it comes down to whether these companies are charging the restaurants they work with or only charging consumers. Grubhub, DoorDash, Uber Eats, and Postmates all regularly partner with restaurants and charge them commission fees.
“I have a real doubt that Grubhub is overtaxing — the default rule should be that it’s taxable, that is the safer position,” said Holderness.
“In some cases, it may not be a question of tax avoidance or uncertainty so much as legitimate uncertainty about what the rules are,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center. Policies vary state to state, and the rules around taxing delivery fees are myriad and often outdated.
When asked about concerns tax experts raised about Uber’s sales and delivery tax policies, a spokesperson for Uber responded with the following statement:
“We collect sales tax on delivery fees where required, with particular attention to recently enacted marketplace facilitator laws. Although California has enacted similar legislation, there is an exception for delivery network companies. Accordingly, we do not believe it is appropriate for Uber Eats to collect sales tax on delivery fees from our users in California at this time. We are deeply committed to compliance, which includes ongoing assessment of developments in local legislation and state-issued guidance.”
DoorDash (which also owns Caviar) declined to comment.
In a statement to Recode, Postmates said it is in compliance with all regulations and tax laws in jurisdictions where it operates, and that it is “[w]orking with lawmakers across markets, both to ensure our operations remain consistent with evolving state-by-state guidance on the tax code, and to balance the unique nature of on-demand products with the goal of ensuring taxable revenues are always collected by the state.”
Grubhub, meanwhile, maintains that it’s in the right for collecting these sales taxes and denied that the food delivery app business models exempt companies from these collections.
“We have been audited by multiple states, multiple times, and in every case we were required to collect and remit sales tax on delivery fees,” said Grubhub’s CEO Matt Maloney.
The threat of regulation
In recent years, local lawmakers have increasingly scrutinized the tech industry. For example, more states are now charging sales tax on products that are purchased online. That’s because of a June 2018 Supreme Court Ruling, South Dakota v. Wayfair, which gave states the rights to demand more tax revenue from online companies that sell goods in their state, even if those companies don’t have a physical location in the area.
California politicians told Recode that they’re also thinking about how the gig economy collects taxes.
“I’m concerned about what appears to be a pattern of activity of these gig companies to not even find out what they should be doing by law,” said California Assemblywoman Lorena Gonzalez, who authored the landmark labor legislation AB 5 that legally pressures companies like Uber and Lyft to reclassify contractors as employees. “It’s unfair competition. If you have a Dominos, for example, that is abiding by the rules, they’re taking the appropriate sales tax out, they’re not going to be able to compete with an app that’s doing all those things.” Dominos is one of the only major pizza chains that does its own delivery, independent of food delivery apps.
If there’s a lesson to be learned by food delivery startups from tech successes of the past, it’s that creatively interpreting outdated regulations can help them get ahead. Amazon largely skipped out on collecting sales tax for third-party seller products until a few years ago when it was facing state regulations to do so — but by then it was already the top online retailer. Uber ignored licensing rules in many states but became the leading ride-hail company in the meantime. And Airbnb delayed its obligation to collect taxes and enforce zoning rules by suing several cities where it operated.
In all those fights, regulators were slow to keep up with tech companies, which took advantage of that to quickly become market leaders, meaning they could afford costly legal battles. But in an era when tech is facing a reckoning with the public and increased political scrutiny, that might change, and regulators may start applying stricter rules to companies like DoorDash and Postmates.
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timalexanderdollery · 5 years ago
Text
DoorDash and Uber Eats aren’t collecting sales tax on delivery fees in some states. That could be a problem.
Tumblr media
Discrepancies between the sales tax practices of companies like DoorDash, as well as its competitors like Uber Eats, Postmates, and Grubhub are raising questions | Getty
It could be the latest business practice in the gig economy to raise regulatory questions.
The food delivery company Grubhub said it has collected hundreds of millions in taxes for delivery and service fees in dozens of states since at least 2011. But Recode has found that in some of those same states, Grubhub’s top rivals in the delivery space, including DoorDash, Postmates, and Uber Eats, don’t appear to be collecting a cent. This discrepancy puts those rivals in a precarious position if regulators take notice and object.
Several tax experts Recode interviewed said food delivery app companies’ tax practices could raise legal concerns. The sales taxes in question are on fees that can amount to as much as a third of the total price of food orders — or at least $120 million per year of taxable dollars on the sales of major food delivery companies in California and New York alone, based on Recode’s calculations on an estimated market size from research firm Forrester. If you account for all of the US, that could amount to hundreds of millions of dollars per year.
The experts told Recode these tax practices could be a liability not just for the food delivery apps but also for the restaurants whose food they deliver. Both the apps and the restaurants could later be on the hook for paying taxes that apps aren’t currently collecting. It’s another example of how existing laws haven’t yet adapted to the gig economy — and in the meantime, these tech companies are taking advantage of the loopholes.
“I would feel very uncomfortable if I were tax counsel for one of those companies if those taxes weren’t being collected,” said Hayes Holderness, assistant professor at the University of Richmond School of Law and a state tax policy expert. Holderness called it an “aggressive” and “risky” decision for companies not to charge sales taxes on delivery — but a “not necessarily unreasonable” stance, and one that could be debated in court. For companies in the competitive food delivery market, the immediate business benefit of keeping sales taxes lower could also outweigh the legal risks, he said.
Gig economy companies have historically loosely interpreted the law — or in some cases skirted it entirely — to benefit their business models, and regulators are increasingly examining their behavior.
The Washington, DC, attorney general announced earlier this week he’s suing DoorDash, arguing that the company misled customers and pocketed workers’ tips. Earlier this year, politicians raised concerns about wage theft when Instacart, DoorDash, Uber Eats, and several other companies were found to be using workers’ tips to subsidize their own costs (the companies all eventually revised their policies — with DoorDash being the slowest to do so — and many workers continue to report low pay). In September, Uber made a baffling argument that its drivers aren’t core to its business as part of its rationale for why a new labor law targeted at gig economy apps didn’t actually apply to the company. And ride-hail companies have similarly been accused of not doing enough to prevent and investigate sexual assaults that occur during rides.
In every case, gig economy companies have argued that they are digital marketplaces matching sellers and buyers and are therefore not financially or legally responsible for things that happen on their platforms.
When it comes to sales tax, companies have an obvious business incentive to avoid charging it: keep prices low, keep customers happy, and keep sales up. And in the food delivery space, which is an increasingly competitive industry with tight margins, that’s an acute pressure.
“Right now there’s an arms race for customer acquisition,” said Sucharita Kodali, a principal analyst at Forrester who specializes in e-commerce. “As venture capital startups, the more growth they can exhibit, that’s still the signal of success, and any lever they can use to help showcase those metrics helps.”
In the past year, DoorDash has emerged as the unexpected market leader and fastest-growing food delivery app in the US, according to research firm Edison Trends, unseating market incumbent Grubhub. The company has aggressively expanded its business, putting pressure on an already crowded market.
If tax laws were more clear, food delivery companies would probably just absorb the cost of charging sales taxes on delivery fees and “move on,” Kodali told Recode. But, Kodali said, in “an age of ambiguity, if it helps them to showcase a better result then why not?”
But it also poses a risk. If states or cities find companies liable for taxes later, they could sue for years of back taxes, several tax experts told Recode. That’s what happened to travel website Expedia, which several cities accused of avoiding as much as $847 million in taxes on room fees. The company has long been embroiled in legal battles over these cases. More recently, the state of New Jersey recently sued Uber for over $650 million in unemployment and disability insurance taxes for allegedly misclassifying its workforce as independent contractors instead of employees.
Laws haven’t caught up with the gig economy
The tax codes governing food delivery apps like Grubhub, DoorDash, and Postmates vary significantly state by state, and they are changing as local governments grapple with how to adapt old laws to the new gig economy.
Generally, some laws in states like California and New York have provisions that could call for sales taxes on delivery and service fees to be collected, according to Scott Groberski, a managing director in state and local tax groups at accounting and tax firm Grant Thornton. Still, it’s very much a gray area and would vary based on the specifics of the contracts between restaurants and food delivery providers.
“With new technology, it’s extremely complicated determining what’s taxable and what’s not — I think this is something that continues to evolve even as we speak,” Groberski told Recode.
In California, for example, it depends if the company contracts with restaurants to “provide a delivery service only” or if it acts as a “retailer” of the food, according to Casey Wells at the California Department of Tax and Fee Administration.
Whether or not a food delivery app company is a retailer depends on the contracts it has with restaurants, Wells said, as well as if the app is marking up the price the restaurant normally charges for the food.
Wells declined to comment on whether or not the law would classify specific companies like DoorDash or Grubhub as retailers or not.
Some tax experts said it comes down to whether these companies are charging the restaurants they work with or only charging consumers. Grubhub, DoorDash, Uber Eats, and Postmates all regularly partner with restaurants and charge them commission fees.
“I have a real doubt that Grubhub is overtaxing — the default rule should be that it’s taxable, that is the safer position,” said Holderness.
“In some cases, it may not be a question of tax avoidance or uncertainty so much as legitimate uncertainty about what the rules are,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center. Policies vary state to state, and the rules around taxing delivery fees are myriad and often outdated.
When asked about concerns tax experts raised about Uber’s sales and delivery tax policies, a spokesperson for Uber responded with the following statement:
“We collect sales tax on delivery fees where required, with particular attention to recently enacted marketplace facilitator laws. Although California has enacted similar legislation, there is an exception for delivery network companies. Accordingly, we do not believe it is appropriate for Uber Eats to collect sales tax on delivery fees from our users in California at this time. We are deeply committed to compliance, which includes ongoing assessment of developments in local legislation and state-issued guidance.”
DoorDash (which also owns Caviar) declined to comment.
In a statement to Recode, Postmates said it is in compliance with all regulations and tax laws in jurisdictions where it operates, and that it is “[w]orking with lawmakers across markets, both to ensure our operations remain consistent with evolving state-by-state guidance on the tax code, and to balance the unique nature of on-demand products with the goal of ensuring taxable revenues are always collected by the state.”
Grubhub, meanwhile, maintains that it’s in the right for collecting these sales taxes and denied that the food delivery app business models exempt companies from these collections.
“We have been audited by multiple states, multiple times, and in every case we were required to collect and remit sales tax on delivery fees,” said Grubhub’s CEO Matt Maloney.
The threat of regulation
In recent years, local lawmakers have increasingly scrutinized the tech industry. For example, more states are now charging sales tax on products that are purchased online. That’s because of a June 2018 Supreme Court Ruling, South Dakota v. Wayfair, which gave states the rights to demand more tax revenue from online companies that sell goods in their state, even if those companies don’t have a physical location in the area.
California politicians told Recode that they’re also thinking about how the gig economy collects taxes.
“I’m concerned about what appears to be a pattern of activity of these gig companies to not even find out what they should be doing by law,” said California Assemblywoman Lorena Gonzalez, who authored the landmark labor legislation AB 5 that legally pressures companies like Uber and Lyft to reclassify contractors as employees. “It’s unfair competition. If you have a Dominos, for example, that is abiding by the rules, they’re taking the appropriate sales tax out, they’re not going to be able to compete with an app that’s doing all those things.” Dominos is one of the only major pizza chains that does its own delivery, independent of food delivery apps.
If there’s a lesson to be learned by food delivery startups from tech successes of the past, it’s that creatively interpreting outdated regulations can help them get ahead. Amazon largely skipped out on collecting sales tax for third-party seller products until a few years ago when it was facing state regulations to do so — but by then it was already the top online retailer. Uber ignored licensing rules in many states but became the leading ride-hail company in the meantime. And Airbnb delayed its obligation to collect taxes and enforce zoning rules by suing several cities where it operated.
In all those fights, regulators were slow to keep up with tech companies, which took advantage of that to quickly become market leaders, meaning they could afford costly legal battles. But in an era when tech is facing a reckoning with the public and increased political scrutiny, that might change, and regulators may start applying stricter rules to companies like DoorDash and Postmates.
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0 notes
corneliusreignallen · 5 years ago
Text
DoorDash and Uber Eats aren’t collecting sales tax on delivery fees in some states. That could be a problem.
Tumblr media
Discrepancies between the sales tax practices of companies like DoorDash, as well as its competitors like Uber Eats, Postmates, and Grubhub are raising questions | Getty
It could be the latest business practice in the gig economy to raise regulatory questions.
The food delivery company Grubhub said it has collected hundreds of millions in taxes for delivery and service fees in dozens of states since at least 2011. But Recode has found that in some of those same states, Grubhub’s top rivals in the delivery space, including DoorDash, Postmates, and Uber Eats, don’t appear to be collecting a cent. This discrepancy puts those rivals in a precarious position if regulators take notice and object.
Several tax experts Recode interviewed said food delivery app companies’ tax practices could raise legal concerns. The sales taxes in question are on fees that can amount to as much as a third of the total price of food orders — or at least $120 million per year of taxable dollars on the sales of major food delivery companies in California and New York alone, based on Recode’s calculations on an estimated market size from research firm Forrester. If you account for all of the US, that could amount to hundreds of millions of dollars per year.
The experts told Recode these tax practices could be a liability not just for the food delivery apps but also for the restaurants whose food they deliver. Both the apps and the restaurants could later be on the hook for paying taxes that apps aren’t currently collecting. It’s another example of how existing laws haven’t yet adapted to the gig economy — and in the meantime, these tech companies are taking advantage of the loopholes.
“I would feel very uncomfortable if I were tax counsel for one of those companies if those taxes weren’t being collected,” said Hayes Holderness, assistant professor at the University of Richmond School of Law and a state tax policy expert. Holderness called it an “aggressive” and “risky” decision for companies not to charge sales taxes on delivery — but a “not necessarily unreasonable” stance, and one that could be debated in court. For companies in the competitive food delivery market, the immediate business benefit of keeping sales taxes lower could also outweigh the legal risks, he said.
Gig economy companies have historically loosely interpreted the law — or in some cases skirted it entirely — to benefit their business models, and regulators are increasingly examining their behavior.
The Washington, DC, attorney general announced earlier this week he’s suing DoorDash, arguing that the company misled customers and pocketed workers’ tips. Earlier this year, politicians raised concerns about wage theft when Instacart, DoorDash, Uber Eats, and several other companies were found to be using workers’ tips to subsidize their own costs (the companies all eventually revised their policies — with DoorDash being the slowest to do so — and many workers continue to report low pay). In September, Uber made a baffling argument that its drivers aren’t core to its business as part of its rationale for why a new labor law targeted at gig economy apps didn’t actually apply to the company. And ride-hail companies have similarly been accused of not doing enough to prevent and investigate sexual assaults that occur during rides.
In every case, gig economy companies have argued that they are digital marketplaces matching sellers and buyers and are therefore not financially or legally responsible for things that happen on their platforms.
When it comes to sales tax, companies have an obvious business incentive to avoid charging it: keep prices low, keep customers happy, and keep sales up. And in the food delivery space, which is an increasingly competitive industry with tight margins, that’s an acute pressure.
“Right now there’s an arms race for customer acquisition,” said Sucharita Kodali, a principal analyst at Forrester who specializes in e-commerce. “As venture capital startups, the more growth they can exhibit, that’s still the signal of success, and any lever they can use to help showcase those metrics helps.”
In the past year, DoorDash has emerged as the unexpected market leader and fastest-growing food delivery app in the US, according to research firm Edison Trends, unseating market incumbent Grubhub. The company has aggressively expanded its business, putting pressure on an already crowded market.
If tax laws were more clear, food delivery companies would probably just absorb the cost of charging sales taxes on delivery fees and “move on,” Kodali told Recode. But, Kodali said, in “an age of ambiguity, if it helps them to showcase a better result then why not?”
But it also poses a risk. If states or cities find companies liable for taxes later, they could sue for years of back taxes, several tax experts told Recode. That’s what happened to travel website Expedia, which several cities accused of avoiding as much as $847 million in taxes on room fees. The company has long been embroiled in legal battles over these cases. More recently, the state of New Jersey recently sued Uber for over $650 million in unemployment and disability insurance taxes for allegedly misclassifying its workforce as independent contractors instead of employees.
Laws haven’t caught up with the gig economy
The tax codes governing food delivery apps like Grubhub, DoorDash, and Postmates vary significantly state by state, and they are changing as local governments grapple with how to adapt old laws to the new gig economy.
Generally, some laws in states like California and New York have provisions that could call for sales taxes on delivery and service fees to be collected, according to Scott Groberski, a managing director in state and local tax groups at accounting and tax firm Grant Thornton. Still, it’s very much a gray area and would vary based on the specifics of the contracts between restaurants and food delivery providers.
“With new technology, it’s extremely complicated determining what’s taxable and what’s not — I think this is something that continues to evolve even as we speak,” Groberski told Recode.
In California, for example, it depends if the company contracts with restaurants to “provide a delivery service only” or if it acts as a “retailer” of the food, according to Casey Wells at the California Department of Tax and Fee Administration.
Whether or not a food delivery app company is a retailer depends on the contracts it has with restaurants, Wells said, as well as if the app is marking up the price the restaurant normally charges for the food.
Wells declined to comment on whether or not the law would classify specific companies like DoorDash or Grubhub as retailers or not.
Some tax experts said it comes down to whether these companies are charging the restaurants they work with or only charging consumers. Grubhub, DoorDash, Uber Eats, and Postmates all regularly partner with restaurants and charge them commission fees.
“I have a real doubt that Grubhub is overtaxing — the default rule should be that it’s taxable, that is the safer position,” said Holderness.
“In some cases, it may not be a question of tax avoidance or uncertainty so much as legitimate uncertainty about what the rules are,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center. Policies vary state to state, and the rules around taxing delivery fees are myriad and often outdated.
When asked about concerns tax experts raised about Uber’s sales and delivery tax policies, a spokesperson for Uber responded with the following statement:
“We collect sales tax on delivery fees where required, with particular attention to recently enacted marketplace facilitator laws. Although California has enacted similar legislation, there is an exception for delivery network companies. Accordingly, we do not believe it is appropriate for Uber Eats to collect sales tax on delivery fees from our users in California at this time. We are deeply committed to compliance, which includes ongoing assessment of developments in local legislation and state-issued guidance.”
DoorDash (which also owns Caviar) declined to comment.
In a statement to Recode, Postmates said it is in compliance with all regulations and tax laws in jurisdictions where it operates, and that it is “[w]orking with lawmakers across markets, both to ensure our operations remain consistent with evolving state-by-state guidance on the tax code, and to balance the unique nature of on-demand products with the goal of ensuring taxable revenues are always collected by the state.”
Grubhub, meanwhile, maintains that it’s in the right for collecting these sales taxes and denied that the food delivery app business models exempt companies from these collections.
“We have been audited by multiple states, multiple times, and in every case we were required to collect and remit sales tax on delivery fees,” said Grubhub’s CEO Matt Maloney.
The threat of regulation
In recent years, local lawmakers have increasingly scrutinized the tech industry. For example, more states are now charging sales tax on products that are purchased online. That’s because of a June 2018 Supreme Court Ruling, South Dakota v. Wayfair, which gave states the rights to demand more tax revenue from online companies that sell goods in their state, even if those companies don’t have a physical location in the area.
California politicians told Recode that they’re also thinking about how the gig economy collects taxes.
“I’m concerned about what appears to be a pattern of activity of these gig companies to not even find out what they should be doing by law,” said California Assemblywoman Lorena Gonzalez, who authored the landmark labor legislation AB 5 that legally pressures companies like Uber and Lyft to reclassify contractors as employees. “It’s unfair competition. If you have a Dominos, for example, that is abiding by the rules, they’re taking the appropriate sales tax out, they’re not going to be able to compete with an app that’s doing all those things.” Dominos is one of the only major pizza chains that does its own delivery, independent of food delivery apps.
If there’s a lesson to be learned by food delivery startups from tech successes of the past, it’s that creatively interpreting outdated regulations can help them get ahead. Amazon largely skipped out on collecting sales tax for third-party seller products until a few years ago when it was facing state regulations to do so — but by then it was already the top online retailer. Uber ignored licensing rules in many states but became the leading ride-hail company in the meantime. And Airbnb delayed its obligation to collect taxes and enforce zoning rules by suing several cities where it operated.
In all those fights, regulators were slow to keep up with tech companies, which took advantage of that to quickly become market leaders, meaning they could afford costly legal battles. But in an era when tech is facing a reckoning with the public and increased political scrutiny, that might change, and regulators may start applying stricter rules to companies like DoorDash and Postmates.
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brajeshupadhyay · 4 years ago
Text
Michael Hiltzik: Uber, Lyft face a gig labor law reckoning
If there were any doubt that California Atty. Gen. Xavier Becerra and his fellow regulators were getting fed up with the continued flouting by Uber and Lyft of the state’s new gig worker law, it was dispelled by their recent legal motion to force the companies into compliance.
In their June 24 filing, Becerra and the city attorneys of Los Angeles, San Diego and San Francisco asked a state judge in San Francisco to issue a preliminary injunction ordering the companies to immediately classify their drivers as employees rather than independent contractors.
That’s what’s required by the state’s gig worker law, known as AB 5. “It’s time for Uber and Lyft to own up to their responsibilities and the people who make them successful: their workers,” Becerra said the day the motion was filed.
After eight years of looking the other way, California officials are finally enforcing the rule of law against these so-called gig companies.
Veena Dubal, UC Hastings School of Law
It should surprise no one that Uber, Lyft and other gig economy companies see it differently and are girding for a fight — including a multimillion-dollar ballot initiative campaign — in which their survival may be at stake.
Designated as independent contractors, drivers are unprotected by minimum wage and overtime rules, receive no workers’ compensation or unemployment insurance benefits, and have to pay for their own gas, insurance, vehicle maintenance and Social Security taxes. They have no right to join or organize into a union.
The dodge of designating employees as independent contractors isn’t new. It was born in the notoriously anti-labor Taft-Hartley amendments of 1947, which first carved out the exception.
But it has become common in an entrepreneurial economy in which high start-up costs prompt business owners to search out savings in a marketplace in which “employment taxes and other workplace liabilities appear to be low-hanging fruit,” as Elizabeth J. Kennedy of Loyola University in Maryland has observed.
Uber, Lyft and other gig economy companies have exploited America’s lax workplace regulations to build businesses addicted to forcing the cost of business onto the shoulders of essential workers.
Even so, it’s unclear that their exploitation of workers has yielded a sustainable business model. Uber and Lyft acknowledge in financial disclosures that they might never become profitable under current circumstances and that things would become worse if they had to classify their drivers as employees. (Uber has lost $15.7 billion and Lyft $4.2 billion in the last three calendar years.)
Becerra’s action — the latest chess move in a lawsuit he originally filed May 22 — is just one of several prongs California officials have aimed against gig employers over alleged misclassification of employees in recent weeks. San Francisco Dist. Atty. Chesa Boudin sued the delivery service DoorDash on June 16 for classifying its delivery workers as independent contractors.
One week earlier, the California Public Utilities Commission, which had carved out a special regulatory designation for “transportation network companies,” informed the companies that as of last Jan. 1 their drivers “are presumed to be employees” and advised that the law requires them to provide the drivers with workers compensation benefits starting July 1.
Today my office initiated a lawsuit against @doordash for illegally misclassifying employees as independent contractors.
“I assure you this is just the first step among many to fight for worker safety and equal enforcement of the law”#PromisesKept
https://t.co/srO3agGWTa
— Chesa Boudin 博徹思 (@chesaboudin) June 16, 2020
Becerra’s action has been lauded as an overdue initiative to protect workers’ rights.
“After eight years of looking the other way, California officials are finally enforcing the rule of law against these so-called gig companies,” Veena Dubal, a labor law expert at UC’s Hastings School of Law, told me. “Because regulators chose not to enforce existing labor laws against the companies, they were allowed to grow precarious work — not just in this state, but all over the world.”
This isn’t a one-sided battle. The companies are fighting Becerra’s lawsuit and, perhaps more consequentially, have placed a measure on the November ballot to overturn AB 5.
Their measure, which will appear as Proposition 22, would effectively designate app-based drivers such as those working for Uber and Lyft permanently as independent contractors and forbid the state or localities to enact ordinances to treat them as employees.
The companies have provided the initiative campaign with a war chest of $110 million so far — $30 million each from Uber, Lyft and DoorDash and $10 million each from Postmates and Instacart, two other delivery services. So it behooves us to take a closer look at the measure.
Proposition 22 attempts to establish a new workplace model — a hybrid of the independent contractor and employment models.
The companies say it would preserve the “flexibility” to set one’s own work days and hours they say is valued by drivers who wish to work around school, caregiving and other work, while guaranteeing minimum pay and access to health coverage.
The measure would guarantee drivers earnings of at least 120% of prevailing hourly minimum wages, a subsidy for health coverage and protection against arbitrary firing.
The companies maintain that the vast majority of their drivers favor remaining independent contractors. Yet that’s misleading because drivers fall into two discrete camps. One is composed of true part-timers who record minimal hours, often abandon the work entirely after a few months, and appreciated the vaunted flexibility. The other is full-time drivers who may be spending 40 to 50 hours a week on the road.
Some 70% to 80% of drivers may drive 20 hours a week or less, says Harry Campbell, a former driver for Uber and Lyft who now runs therideshareguy blog, an information service for drivers. Full-timers, while less numerous, account for more than 50% of the hours worked through the companies’ app.
“For a majority of the drivers this isn’t a full-time income, so it shouldn’t be shocking that they want to stay independent contractors,” Campbell says. “But the drivers working 40 to 50 hours a week are basically working like employees without any of the benefits or protections. They’re the ones spearheading the effort to hold the companies accountable to treat drivers like employees.”
And they’re the drivers who would bear the brunt of the changes wrought by Proposition 22. Campbell says, however, that when even part-timers become educated about what AB 5 would do for them and that the law wouldn’t prevent the companies from allowing them some of the flexibility they crave, “some of them change their opinion of the law.”
There can be no doubt that the principal beneficiaries of Proposition 22 would be the companies themselves. If they were forced to classify their drivers as employees, according to the state’s nonpartisan Legislative Analyst’s Office, the resulting higher costs would “decrease these companies’ long-term profitability, which could reduce these companies’ stock market values and stock prices.”
The measure would impose some new costs on the companies, but those costs would probably be “minor,” the Legislative Analyst’s Office reckons.
Indeed, the compensation and benefits the companies would pay under Proposition 22 would fall far short of the costs their drivers must shoulder. The UC Berkeley Labor Center estimated in October that 120% of the California hourly minimum wage of $13 in 2021, or $15.60, would effectively shrink to $5.64 an hour because of provisions in the initiative.
For example, drivers would be paid only for “engaged” time, from when they are en route to pick up a passenger or delivery to when they drop off the rider or package, not for waiting time between assignments. That constitutes as much a one-third of their work time, Berkeley estimated, reducing the $15.60 to only $10.45.
Some drivers would gain from a stipend of up to about $367 a month for health insurance, which could be applied to Affordable Care Act plans from Covered California or other plans. But that would be granted only to drivers averaging 25 engaged hours a week or more. Those with 15 to 25 hours would receive half as much, and those with fewer than 15 hours would receive nothing.
“The vast majority of drivers would not qualify” for the benefit, Berkeley says.
Uber and Lyft have chosen to emphasize the purported consequences of enforcing AB 5, rather than the plain facts of their labor relationships. They , paint a picture of an army of disenfranchised drivers cast aside and unable to ply their trade.
They even hint that AB 5 could put them out of business entirely. Stacey Wells, a spokeswoman for the Proposition 22 campaign, said that if the initiative fails the companies might have to pare their driver ranks, which number as many as 400,000 in California, by as much as 90% to accommodate the added costs of treating drivers as employees.
Yet by any reasonable definition, the companies’ drivers are employees. According to rules set down by the California Supreme Court in a 2018 decision and codified in AB 5, businesses must consider workers employees unless they can meet a three-part test showing that the workers are free from the control and direction of the hiring business, that they’re performing work outside the normal course of the hirer’s business, and they customarily work independently in the same trade or occupation as the work they’re doing.
UC Berkeley calculates that hidden costs would reduce the minimum earnings guaranteed drivers by Uber and Lyft in Proposition 22 by nearly two-thirds.
(UC Berkeley Labor Center)
Becerra maintains that Uber and Lyft can’t meet any of those elements. The drivers are engaged in the companies’ main business of transportation; their compensation is set by the companies, which can change it unilaterally; their performance is monitored by the companies; with the exception of the choice of the hours they wish to drive, all other terms and conditions of their work are set by the companies.
Uber and Lyft have maintained from the start that they’re exempt from AB 5 because they’re not really transportation companies, merely purveyors of the software that drivers and passengers use to arrange rides.
Some courts have dismissed that argument out of hand — “Uber simply would not be a viable business entity without its drivers,” U.S. District Judge Edward M. Chen of San Francisco declared in 2015.
Over the next few months, as the state lawsuit progresses through the courts and election day draws nigh, the survival of the gig companies’ business model will be put to the test. It should not be overlooked how much that model depends on exploiting workers.
“The initiative would codify terrifyingly low labor standards into law,” Dubal says, “undoing over a century of norms around a living wage and safety net protections for workers.”
That’s true. The power of workers to ensure decent working conditions has been on the decline in America for more than half a century. Proposition 22 would hasten the slide.
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jobsearchtips02 · 4 years ago
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Some Uber, Lyft motorists fear companies will use unemployment benefits against them
A chauffeur and passenger wearing protective masks leave the ride sharing pickup location in a vehicle displaying Uber Technologies signs at San Francisco International Airport in San Francisco, California, U.S., on Monday, May 4,2020 Photographer: David Paul Morris/Bloomberg by means of Getty Images
Bloomberg
Leonardo Diaz is in a tough spot.
Diaz, a driver for Uber and Lyft, has actually been jobless for more than 2 months.
The 51- year-old hasn’t picked up riders for fear of contracting Covid-19 and, in turn, infecting his family.
However Diaz, a Los Angeles homeowner, is also afraid to apply for welfare, as nearly 39 million Americans have done because mid-March amidst to the coronavirus pandemic.
Diaz is torn.
On one hand, he needs the financial support. On the other, he believes using for unemployment might undermine his and other Californians’ fight versus Uber and Lyft and other business in the gig economy to be thought about staff members instead of independent professionals.
” I feel like they’ll take advantage of what’s going on with Covid-19 and then state, ‘You see, they’re independent contractors,” Diaz stated.
Staff members vs. independent professionals
California passed a law in 2015 needing gig companies to deal with independent specialists as staff members, becoming the very first state to do so. The law, Assembly Costs 5, worked in January however is being challenged in court.
Agreement employees don’t enjoy the workplace advantages workers do, such as employer-sponsored health insurance or paid leave.
And, as the pandemic is highlighting, companies have various requirements relative to their professionals around joblessness insurance.
Broadened welfare
Drivers fear PUA applications could be used in California court to weaken the state’s brand-new work law, and in other states like New York where they’re attempting to get a similar law passed.
While some labor lawyers believe their concern is valid, others believe the danger is overblown.
” Individuals should be assured,” said Michael Bernick, an attorney at business law office Duane Morris. “I can’t think of the business in any state conversations or initiative stating, ‘Look, by filing for PUA you agreed that you were an independent contractor.’ That’s simply not sensible.”
‘ Legitimate fear’
Ismael Perez, a full-time Uber and Lyft motorist, gotten PUA advantages in California prior to speaking with a local group, the Mobile Employees Alliance, of the possible danger.
Perez, who resides in the city of La Habra Heights, began receiving weekly joblessness payments of $767 (This represents $167 a week from the state and a $600 supplement moneyed by the federal government through July.)
He hesitates that obtaining PUA benefits will cost him countless dollars in back pay he thinks he’s owed by the ride-share companies for overtime hours as an employee, in addition to setting back the broader chauffeur movement.
Drivers are having a hard time huge time because they need cash. It’s hard.
Leonardo Diaz
Los Angeles-based Uber and Lyft driver
” My concern is, will it present a hazard to my labor disagreement?” said Perez,42 “And furthermore, progressing, does that endanger my worker rights also?”
Julia Rosner, a work lawyer at Legal Solutions NYC, stated it’s “absolutely a genuine fear.”
” And it’s sort of conceding a point they do not wish to concede,” she said.
However gig employees in California might feel they have no option. They might make an application for the state’s standard unemployment insurance coverage benefits, suggested for employees, and appeal a rejection by claiming they were misclassified as independent contractors instead, Rosner stated.
An appeal, nevertheless, could take months, specifically as state unemployment workplaces are overwhelmed with countless new applications weekly, Rosner said. That’s a hard situation when numerous may require the money now, she stated.
” Motorists are struggling huge time because they require cash,” Diaz stated. “It’s tough.”
Not all worried
Not all motorists are always worried.
The Protect App-Based Drivers and Solutions coalition represents 56,000 chauffeurs for business like Uber and Lyft, Instacart, Doordash and other gig companies. The group supports a tally effort in November that would lead chauffeurs to be reclassified as independent contractors.
Stacey Wells, a spokeswoman for the campaign, which is funded by gig companies, called the notion of chauffeurs being afraid “an incorrect story” and said business have actually been striving to support their employees around looking for welfare.
Business wouldn’t have any way of understanding which specific motorists requested PUA, she stated. They likewise have not attempted striking back against drivers who were outspoken throughout the push to pass Assembly Expense 5, said Wells, who questioned why drivers would think the circumstance would be different with joblessness.
Plus, in circumstances where independent contractors request standard unemployment insurance coverage, the state, in many cases, will automatically convert it into a PUA claim– implying that employee wouldn’t be making an active choice to make an application for PUA, stated Bernick, previous director of California’s Work Development Department.
Matthew Wing, a representative for Uber, also wanted to assure chauffeurs.
” Congress totally moneyed pandemic unemployment help for gig employees so that every state, many of which face historic deficits, could provide these employees immediate financial backing at no cost to their own state funds,” he said.
Uber has also created online guides in each state to assist chauffeurs and shipment individuals obtain unemployment, he added.
A spokesperson for Lyft didn’t respond to a request for remark.
Strong ground
Ultimately, labor lawyers think chauffeurs rest on solid legal footing in spite of their worries.
Julie Su, California’s labor secretary, stated in an April 14 memo that self-certification of eligibility for PUA unemployment benefits “does not impact decisions of worker status under state law for other defenses and benefits.”
The letter is most likely all that’s required for a California court “to get rid of” of any potential employment argument arising from PUA advantages, said William Sokol, a labor attorney with Weinberg Roger & Rosenfeld who’s based in the Bay Location.
” They will try every technique their attorneys can find in the book to avoid paying their employees good wages and the benefits that all their staff members should get by law,” Sokol said.
Similarly, Corey Husack, a federal government relations manager at the Washington Center for Equitable Development, a left-leaning think tank, stated California “workers are on very firm ground.”
However that does not imply gig companies will not ultimately try leveraging motorists’ PUA category in court.
” Anything is possible in court, and PUA is a brand-new program, so I can’t state definitively ‘No [they won’t],'” he stated.
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from Job Search Tips https://jobsearchtips.net/some-uber-lyft-motorists-fear-companies-will-use-unemployment-benefits-against-them/
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fmservers · 6 years ago
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The lobbying is fast and furious as gig companies seek relief from pro-labor Supreme Court ruling
Antoinette Siu Contributor
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Antoinette Siu is a reporter for CALmatters.
For four years, Edhuar Arellano has left his house at 7 a.m. on weekdays to drive customers around the Bay Area for Lyft and Uber . Most days, he doesn’t get home to Santa Clara until 11 p.m. On weekends, he delivers pizzas to make ends meet.
Like a lot of drivers plugging in to ride-hailing apps for work, he likes the flexibility the gig economy has offered. But given the choice, Arellano says he wishes he could just become an employee. That would get him paid vacation, benefits, overtime, his own health insurance and perhaps more say over his working conditions.
“We need to accept whatever they want,” said the 55-year-old father of two grown children. “I can’t control anything.”
That quandary is behind a ferocious battle quietly playing out in the Capitol in the final days of the legislative session, which ends Aug. 31. Lobbyists for ride-sharing companies and the California Chamber of Commerce are scrambling to delay until next year (and the next governor’s administration) a far-reaching California Supreme Court decision that could grant Arellano’s wish—and, businesses fear, undermine the entire gig economy.
The April ruling, involving the nationwide delivery company Dynamex Operations West Inc. and its contract drivers, established a new test for enforcement of California wage laws, and made it much harder for companies in California to claim that independent contractors are not actually employees.
Though the ruling only applies to California, the state’s labor force is so huge that it has already had national impact. Shortly after the decision, U.S. Sen. Bernie Sanders of Vermont introduced a bill to make a version of California’s new rule the federal standard, a move that only added urgency to employers’ calls for state lawmakers to hit the pause button on implementing the ruling.
“Businesses are very concerned. The key is who’s going to be sued here in the near future,” said Allan Zaremberg, president of the California Chamber, which represents 50,000 businesses.
They should be, says labor leader Caitlin Vega, who has been similarly lobbying Capitol Democrats to refrain from meddling and let the Supreme Court decision move forward.
“Companies have made so much money already at the expense of workers,” Vega, the legislative director of the California Labor Federation said Tuesday during a harried break between Capitol meetings. “We really see the Dynamex decision as core to rebuilding the middle class.”
State and federal labor laws give employees a wide range of worker protections, from overtime pay and minimum wages to the right to unionize. But those rights don’t extend to independent contractors, whose ranks have grown dramatically in the gig economy.
Apps such as Uber, TaskRabbit and DoorDash, which match customers and services online and in real time, have given workers an unprecedented ability to freelance but they also have blurred traditional employer-employee relationships and, labor advocates say, invited exploitation.
Some 2 million people, from Lyft drivers to construction workers, consider themselves independent contractors in California. In 2017, according to the Bureau of Labor Statistics, about one in 14 workers was an independent contractor nationally.
If state lawmakers don’t rewrite the law or stall its implementation for a few months, as businesses want—which the Legislature can legally do, though the clock is ticking—the Dynamex decision will subject businesses in California to a standard that is tougher than the federal government’s or most states’.
Known as the “ABC test,” the standard requires companies to prove that people working for them as independent contractors are:
A) Free from the company’s control when they’re on the job;
B) Doing work that falls outside the company’s normal business;
C) And operating an independent business or trade beyond the job for which they were hired.
That’s a high bar for the many companies whose bottom lines have depended on large numbers of contractors to deliver a particular service. According to the business lobby, in the months since the Dynamex decision, law firms have received 1,200 demands for arbitration and 17 class action lawsuits.
Last month, business leaders sent a letter to members of Gov. Jerry Brown’s administration, warning that the new test would “decimate businesses,” and urging the governor and Legislature to suspend and then limit the court’s ruling to only workers involved in the Dynamex case. The letter also asked that the decision not apply to other contractors for the next two years.
Not all those contractors are in tech, Chamber head Zaremberg points out. Emergency room doctors and accountants, for example, could also be impacted. Emergency hospitals and trauma centers contract their doctors through medical groups, and doctors generally work at a combination of hospitals and community clinics.
Photo: shapecharge / iStock / Getty Images Plus
Dr. Aimee Mullen, president of the California chapter of American College of Emergency Physicians, confirms that ER docs are among those uncertain about their contractor status.
“A lot of our members use that model. It’s choice. They like flexibility. They like working at multiple hospitals,” Mullen said.
The California Labor Federation’s Vega contends that, disruptive though it may be, the Dynamex ruling is the right one, particularly on worker exploitation. The core group affected tends to be low-income and immigrant workers, she said.
“The Dynamex decision was a victory for working people—truck drivers who are cheated out of wages, warehouse workers forced to risk their health and gig economy workers who want to be treated with dignity and respect,” Vega wrote in a Sacramento Bee op-ed.
Some workers see room for hybrid solutions. Edward Escobar, a San Francisco ride-hail driver of four years and founder of the Alliance for Independent Workers, a group formed by drivers three years ago, says he has seen a big decrease in how much these companies compensate drivers without a commensurate increase in control over working conditions.
Escobar believes gig companies are trying to have it both ways, and should give their workers either true independence or full employment. His proposal: Let workers choose their own classification, with wage and benefit protection for those who choose to be employees, and more control for contractors over which rides to take and what prices to set.
“These tech titans have been taking advantage of these gray areas,” Escobar said.
Assembly Speaker Anthony Rendon, a Paramount Democrat, said earlier this month that while the Legislature is eager to delve into workforce issues, leaders do not have adequate time to act on it before the session ends next week.
“The Dynamex​ decision strikes at the core of what the future of work looks like in our society,” Rendon said in a statement. “From the decline of union membership to court rulings like the Janus decision, we’ve seen the continual erosion of workers’ rights. If the Legislature is to take action, we must do so thoughtfully with that in mind. That will not happen in the last three weeks of the legislative session.”
Nor are the stakes likely to be lowered for workers like Arellano.
“If I don’t work, I have no money,” said the Lyft and Uber driver. “Everything is so expensive in Santa Clara and the Bay Area.”
CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.
Via Jonathan Shieber https://techcrunch.com
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vennomax · 7 years ago
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The Future Of Work In Asia-Pacific
New Post has been published on http://www.vennomax.com/technology/the-future-of-work-in-asia-pacific/
The Future Of Work In Asia-Pacific
Summary
Future-proofing human workers is about more than hard skills; we need to encourage students to think creatively across disciplines, and start valuing “softer” skills.
New technologies and business models have the potential to further entrench social inequality — this has to be addressed in solutions, or those divides will only grow.
Automation for its own sake isn’t the answer. Companies need to look at which areas stand to benefit from human empathy and creativity, and restructure roles accordingly.
How do advances in artificial intelligence and automation stand to affect the way we work and live our lives? At Adobe’s Think Tank event in Sydney, thought leaders from the worlds of technology and innovation discuss what Asia-Pacific’s workplaces and employees might look like in 20 years’ time.
What to automate, and what to leave to people?
The Australian government reports that as many as 40 per cent of jobs will be impacted by automation within the next 15 years. The panellists all immediately agree that going full steam ahead and using AI and robotics to automate jobs simply because we can is unwise; a more nuanced conversation needs to be had first about the sense of purpose which human beings derive from work.
“In post-independence India, it’s a point of pride to have a job and work, to provide for yourself and your family,” says Harlina Sodhi, Head of Culture & Capability at IDFC Bank. “And in agricultural areas, it’s seen as a matter of legacy.” Author and management consultant Abhijit Bhaduri adds that in a collectivist society like India, “work is a source of identity not just for you, but for your family.” Therefore, a layoff doesn’t just affect the economic security of the individual and their family, but also in some instances, their social standing. Automation for its own sake would overlook the social impact of such displacement.
“We need to get a handle on what humans can bring that is unique, what you can technologize, and how can you use both of them really well,” says Dr Fiona Kerr, Professor of Neural & Systems Complexity at Adelaide University. “What kind of relationship do we want to have with technology, and why do we buy into that particular technology in the first place?”
So it’s not a case of asking ‘human or robot?’ but rather a case of asking which context requires which. “There’s a severe over-optimism that technology is going to save the world,” says Shiao-Yin Kuik, Director of The Thought Collective: “But seriously, if you’re dying in a hospice, would you rather have a human or a robot holding your hand?” Kerr agrees that in those vulnerable moments, the neurophysiological benefits of human touch and eye contact can and should be considered significant enough to outweigh the efficiency of a robotic healthcare worker. She adds, though, that outside of those moments where patients require human contact and reassurance, we can examine what can be automated, and make informed decisions.
Reskilling workers means rethinking education as a whole.
“Babies born today are likely to live to 100; the lifecycle of what we know is shrinking, but we’re going to live longer,” says Su-Yen Wong, Chairman of Nera Telecommunications. “People have to be able to learn and relearn over their lifetime.” The challenge here is that flexibility and improvisation aren’t traits that are necessarily fostered by existing educational institutions. “There’s going to be devastation for people who are unprepared,” says Bhaduri. “We debate how to innovate, but not about how to re-skill people.”
Kuik believes that in order to future-proof education, we must go back to basics, and cultivate a way of thinking which is less rigid. “There’s a huge distinction between teaching someone to think mathematically, and getting them to just pass an exam,” she says. “If you have someone who can think mathematically, artistically, engineering-wise, that’s a very powerful person. The problem is, a lot of education systems are not creating that result or rewarding that behaviour.”
This holistic approach to education is just as important, the panel suggests, as nurturing talent in STEM fields. “I think constructivism gives students a great mental framework to approach solving problems with all the tools at hand,” says Dr Joseph Sweeney, Advisor at IBRS. “It’s a thinking methodology, not just about teaching kids to code. I actually think we’re going to see less coding jobs in the near future.”
Kuik and Kerr believe that in addition to complex thinking, workplaces should be seeking employees with empathy and interpersonal skills, which have historically been underappreciated even though it has been proven time and again that they contribute to the social capital of a working environment. Not to mention, as Kuik puts it, “complex thinking people can cause all kinds of problems if they don’t know how to relate to others!”
This brings up another question; which skills do we prioritise, and which do we overlook? Sarah Kaine, Associate Professor at UTS Business School, points out that a lot of the time, we have a tendency to gender competencies centred around care, which results in financial inequity in these professions, compared to analytically-focused industries like finance or law. “I’d like to see a realignment of values,” she says.
Solutions will vary depending on region and culture
“There’s an element of choice in work for some of us, but for plenty of people in Asia-Pac, there isn’t,” says Mark Henley, Director of Transformation & Digital Strategy APAC at Adobe. Socioeconomic context can’t be ignored.“It’s important to have perspective,” says Wong. “We’re talking about AI and robotics, but there are still regions in the world where electricity or a tractor are considered disruptive technologies. It’s a really broad spectrum.”
It is easy to have a heavily Western-skewed outlook when it comes to these technologies. But culture plays a huge role in how technology is adopted and used in a society. For instance, we have seen a high uptake of bots in China and Japan, but less so in other Asian countries.
“A lot of the discourse around technology is about individual empowerment, how do I become my physical and mental best,” says Kaine. “We’ve seen the development of that technology in some very Western, individualistic circumstances, and that’s quite a clash with some cultures.”
“In a lot of Asian countries, it’s the group and not the individual that counts,” says Wong. “There’s a huge race to do what is possible, an East vs. West competition to see who can come up with these solutions… but to what end? What are we going to do with all that free time?”
If the solution doesn’t work for everyone, it doesn’t work at all.
“As Western society has become increasingly materialistic, we can feed and clothe ourselves fairly cheaply, yet the cost of healthcare has skyrocketed,” says Henley. “Achieving that standard of living still evades many people.”
Evolving business models might purport to offer a greater variety of opportunities to workers, but Kaine points out that they are still exclusionary to some extent, whether by design or not: “If you’re a freelance architect and you’re in demand, the gig economy is working for you. If you’re a cleaner or a driver, or doing odd jobs, it’s not working in the same way. We need to recognise that labour segmentation takes place in organisations and across the broader economy.”
“It’s not just a question of ‘what will technology do’; this is still us making decisions,” says Kerr. “A company could take the gig economy model and pay workers to do tasks that can’t be automated, and have them all on short term, low paid contracts.” The gig economy is causing closed opportunity markets, and the panel agrees that the removal of representation and rights for individuals is probable; and it will be workers without a university education, from lower ends of the socioeconomic bracket, who will be affected the most.
“We say we don’t know where this technology is going, but that’s patently false,” says Sweeney. “What nobody gets right is how do people then use that technology, and what are the social ramifications?” As Kaine puts it, you can’t plan for uncertainty or ambiguity, but inequality doesn’t happen by accident. “Business models themselves aren’t neutral, and neither is technology as it’s evolved,” she says. “It’s used in particular ways. We shouldn’t assume that there’s this neo-classical neutrality to the market of technology.”
Ultimately, the panel remains optimistic about the future of work in Asia-Pacific, although they acknowledge that there is a lot of hard work ahead. “I think it’s important that we not decouple work from life, business from society, technology from humanity,” says Wong. Sodhi advocates the inclusion of underrepresented voices in reshaping company practices, especially women. Bhaduri’s “first, second and third recommendation” are all to rethink education. And finally, Henley advises businesses to “rehumanise” their organisations, and reaffirms that the coming avalanche of technology can have an undoubtedly positive influence — but it all depends on how we choose to act.
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shaizstern · 7 years ago
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Article from NYT: Detroit: The Most Exciting City in America?
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Detroit's economy and auto industry were among the hardest hit after the 2008 recession, but the city is in the midst of renewal.  Photo by Tony Cenicola/The New York Times. 
By REIF LARSEN
I’ve always found the best way to read a city’s mood is on a bicycle. You move at a speed that allows for a kind of mutual handshake with the urban topography.
This past summer I shook hands with Detroit. Specifically, I signed up for Slow Roll, a mass social bike ride. Slow Roll (pronounced “Sloow Roooooooooll!”) was co-founded seven years ago by Jason Hall and Mike MacKool as a small, motley group of cyclists who bonded while riding motorless in the Motor City, evading the police and potholes and irate drivers. Over the years, Slow Roll has evolved and grown up alongside its hometown and now the Detroit police escort as many as 4,000 Slow Rollers on a weekly ride designed to highlight one of the city’s many historic neighborhoods.
Unfortunately, the Slow Roll I was supposed to take part in was canceled hours before its start because of a threatening thunderstorm. But, as the old saying goes, “80 percent of life is showing up.” So I showed up.
The Slow Roll gathering point, in front of the old Masonic Temple, was a ghost town. There was me, a young African-American man named Woody who had been Slow Rolling since the beginning (“Since before the beginning”) and three middle-aged white women who had come in from the suburbs. This was their first Slow Roll and they hadn’t heard the ride had been canceled.
“Don’t worry,” said Woody. “They’re coming.”
The women looked doubtful beneath their bicycle helmets. Not too long ago suburbanites rarely came downtown. I remember visiting Detroit in 2001 and being unnerved by how empty the streets were. It felt like the beginning of a zombie apocalypse movie. The national media participated in constructing this portrait of Detroit as the ultimate failed American city, artfully feeding the public’s appetite for ruin porn with photos of decaying buildings, majestic theaters crumbling into dust, trees sprouting through walls.
Over the last five years, however, Detroit’s downtown corridor has seen a veritable explosion in real estate investment. Much of this growth was precipitated by Dan Gilbert’s now-famous decision to move the headquarters of his mortgage lending company, Quicken Loans, to a building overlooking Campus Martius Park in 2010. Mr. Gilbert, the “mayor of Gilbertville,” as he is sometimes mockingly called, now owns a significant portion of the downtown, over 60 properties in all. Today, the sidewalks of Gilbertville are packed with millennials taking a break from beach volleyball to sip craft beer and nibble on artisanal pickles.
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Detroit Vegan Soul. Credit: Tony Cenicola/The New York Times
As capitalism returns to Detroit’s downtown in all its feverish forms, you can see the city materialize before your eyes. It’s like watching hot lava cool: There is Gather, the trendy new communal table restaurant; there is the Little Caesars Arena, the new home of the Pistons and Red Wings; there is the new Q-Line streetcar whispering down Woodward Avenue; there is the future home of Shinola’s boutique hotel (another Gilbert joint).
In Detroit, the future is still being written. Time and time again I felt giddy with possibilities, informed in large part by the innovators I was talking to. Yet many of these same innovators — community activists, artists, small business owners — took issue with the trendy notion of a “New Detroit,” as this term largely ignored the fiercely independent and creative spirit that has existed in the city for decades and made Detroit such a haven for creatives and visionaries in the first place.
Indeed, those who have been here for the long haul were skeptical that the massive redevelopment downtown would translate to any kind of sustainable change in the surrounding neighborhoods, areas that largely bore the brunt of the Motor City’s long decline. How Detroit navigates the various dangers of regeneration and gentrification seems a particularly poignant question given that this year is the 50th anniversary of the 1967 Detroit race riots that exposed the deep tensions ingrained within a city that remains one of the most segregated in the country.
BACK AT THE Masonic Temple, the suburban women were growing restless in their activewear.
“Maybe we should leave,” one of them said.
“Oh, they’re coming. I bet you,” said Woody. “If 100 people show up, you’re buying us all dinner.”
We waited. And sure enough, they started to come. And come. Detroiters, it turns out, will not be discouraged. Out of necessity, they have learned to ignore advice from officials and make do themselves. After all, it was only four years ago that their city declared bankruptcy, the largest American metropolis to ever to do so. The local city government had all but stopped providing essential services. Trash bins went uncollected. Forty percent of all streetlights were out. In many parts of town, the police would not come if you called. Whole blocks were abandoned, blighted. Grass grew tall; the wilderness was reclaiming the city.
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The Dequindre Cut Greenway, a new bike bath that traces an abandoned rail line. Tony Cenicola/The New York Times
But throughout this time, Detroiters persisted, as they always had. Largely left behind by the public sector and a foundering automobile industry, people adapted, bartering for services, trading welding work for a D.J. gig, founding their own recycling program, forming powerful local community organizations that fulfilled the role normally reserved for the government.
Over the years, countless artists like Dabls (“Iron Teaching Rocks How to Rust”), Tyree Guyton (“The Heidelberg Project”), and Mitch Cope and Gina Reichert (“Power House Productions”) claimed the city as their canvas, transforming neglected buildings into profound art pieces more affecting than anything found in a museum. Urban farmers converted vacant lots into founts of organic produce. The national narrative from this time was usually about how a once-great 20th-century city was visibly dying before our eyes, but this was also the story of how the citizens of Detroit continued to thrive, redefining what a 21st-century city might look like.
Maybe a 21st-century city looks like a crowd of Slow Rollers. People from all walks of life. All colors. Some were riding beater bikes, some were on tricked-out skull and chrome low riders. Some people were in wigs. Many had elaborate boom box set ups, as though music had been invented solely to play on a social bike ride.
“They’re still coming,” Woody said. “We would’ve gotten 3,000 if they hadn’t canceled.”
We ended up with about 200 riders. The thunderstorm never came. Woody kindly did not point out that the skeptical suburbanites owed us all dinner.
Since this wasn’t an authorized Slow Roll anymore, we lacked both an official leader and a police escort. No matter: we collectively chose a route and policed ourselves, just like the old days. We rolled slow, clanging our bells as we brought traffic to a standstill. To stop traffic in the Motor City using only the power of 400 bicycle wheels is a deliciously powerful feeling. Joy was in the air. Someone was playing D.J. Jazzy Jeff at very loud volume. The city wrapped us in its arms. We rolled down Cass Avenue, over Interstate 75 to Detroit’s newly revamped waterfront, past children cartwheeling through geometric fountains and couples strolling for views. Across the glassy Detroit River we could see the low-slung skyline of Windsor, Ontario.
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Works from the artist Dabls (“Iron Teaching Rocks to Rust”) at the African Bead Museum. Credit: Tony Cenicola/The New York Times
“Sloow Roooooooooll!” we yelled at Canada.
The man next to me had precariously attached a giant speaker to the back of his bike with a bungee cord and was blasting “Purple Rain.” Prince propelled us. From the waterfront, we turned north, heading up the Dequindre Cut Greenway, a new bike path that traces an abandoned rail line from the river to the hip Eastern Market district, home of a sprawling farmers market and annual public mural festival.
Like the High Line in New York City, the Dequindre Cut is an ingenious piece of industrial adaptation. Sheltered from the city through which it slices, the underpasses of the Cut are adorned with gorgeous commissioned graffiti murals that serve as a kind of public meditation on urban recovery. One piece by the artist FEL3000ft reads, “A star is born through immense pressure and we have had our fair share. That beacon of light you see in the dark is our fair city rising from the night sky.”
THERE ARE PLANS to extend the Greenway into a giant loop around the city. Slow Roll co-founder Mr. Hall wants to start a program that gives every citizen a bike. There is space to dream big in Detroit, to do things that would be impossible almost everywhere else, and this is part of the reason it feels like the most exciting city in America right now.
I met with a group of motivated high school and college students who were working with Phil Cooley, co-founder of the business-incubator Ponyride, and Ben Wolf, a design/build fabricator, to construct the Dequindre Cut Freight Yard, a portable cafe, D.J. booth and pavilion made completely out of modular shipping containers.
“It’s cool to actually be changing the place I live,” said Jose Vasquez, a soft-spoken senior at Western International High School.
“Remind me to tell you about my next project,” said Mr. Wolf as I was leaving.
In Detroit, there is always a next project. Such ingenuity is rife across the city. The day after my bootlegged Slow Roll, I visited Recycle Here!, which, on the surface, resembles your average recycle drop-off center — plastic goes here, newspaper there. Recycle Here! was founded in 2005 by Matthew Naimi, a stocky, bearded man with a barrel laugh and a healthy sense of the surreal. Back then, the city lacked any kind of official recycling program. The Saturday drop-off days, like the Slow Roll, quickly became community events. Everyone came out, traded old junk and started to build weird sculptures out of the refuse.
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The new Q-line streetcar in Detroit. Credit: Tony Cenicola/The New York Times
“And if you’re going to have a recycle center then obviously you need band practice rooms,” Mr. Naimi laughed. Obviously. This spirit of utilitarian-activist-creativism abounds at Recycle Here!’s sprawling facility that includes the Lincoln Street Art Park, an egalitarian space of reuse and collaboration, and site of more than one legendary outdoor party (the motto, “Share Your Candy,” is prominently displayed). Recycle Here! also runs a robust after-school and camp program that educates young people on environmental stewardship and sustainability.
I thought a lot about sustainability during my time in Detroit. We tend to envision sustainable cities in terms of green architecture, renewable energy, an emphasis on innovative mass transit. By many of these metrics, Detroit continues to struggle, in part because its population is scattered across such a massive area, about 139 square miles, of which 40 square miles, an area almost twice the size of Manhattan, stand vacant.
Public transport in the city is woeful. In a famous case of commuter hell, a factory worker named James Robinson had to take a bus partway to work and then walk the other 21 miles round-trip. He would get home at 4 a.m., and have to leave for work again at 8 a.m. Detroit is the largest American metropolis without a proper public transit authority, and much of the resistance to any kind of cohesive transit plan can be traced to a longstanding mistrust between the affluent suburbs and the city’s low-income neighborhoods.
This could be changing. The city just opened its first operating streetcar in over 60 years, the Q-Line, which was largely privately funded and runs from Campus Martius up and down Woodward Avenue for 3.3 miles. The Q-Line has garnered some controversy as being primarily a “show pony” targeted to tourists that does not provide any real commuting benefit to many Detroiters like James Robinson.
Perhaps. But every revolution needs a show pony. This past summer I rode the Q-Line a couple of weeks after it first opened, before a fare was being collected. The tram was packed with young and old, black and white. Everyone had an opinion about the streetcar; everyone was suddenly an expert on the intricacies of urban transportation. As we slid past buildings being thrown up at a lightning pace, I felt a bit like I was on a Disney ride.See the future American City being built before your eyes!
Part of the Q-Line’s uphill battle is that the American City in question is still very much the Motor City, conceived around the encapsulated mentality of the automobile. Again and again I marveled at the efficiency of an Interstate System designed to penetrate deep into the urban grid.
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The Detroit waterfront. Credit: Tony Cenicola/The New York Times
Given that Detroit has lost over 60 percent of its population since the heyday of the 1950s, there is hardly any traffic on these highways, allowing you to essentially get from any two points in about 10 minutes. When I drove, I was early to every meeting. It was the American dream! Except it wasn’t: As I meandered down mostly empty four-lane freeways in my Ford Fiesta rental, I became acutely aware that, unlike on the Slow Roll or Q-Line, I wasn’t meeting anyone. I was alone, trapped in a cocoon. The car, once hailed as the key to every major United States city, is essentially the undoing of organic urban cohesion.
While in the past Ford and G.M. have been accused of ignoring the needs of their hometown, both car companies have begun to shift toward embracing the 21st-century Detroit citizen, who either cannot afford to own a car or else might choose not to. Ford in particular has rebranded itself as a “mobility” company, investing heavily in new ride sharing technology.
I visited Ford’s sprawling campus in Dearborn, Mich., and met with Jessica Robinson, director of City Solutions, in a towering white garage space surrounded by Ford Fusions that had been converted into autonomous vehicles, their trunks stuffed full of processors. A nearby screen eerily displayed the world from the car’s perspective. I was a green flickering blob.
“We can’t just think like a car company anymore,” Ms. Robinson said. “We have to become ethnographers. So we went into communities and asked how people were getting around to try and address solutions from the ground up.”
Ford started a competition called Go Detroit Challenge, which funded six Detroit tech companies working on innovative transportation solutions including CART, a program which pairs customers, ride share companies, and grocery stores to enable low-income populations greater access to healthy food.
This year both Ford and G.M. have doubled down on the potent combo of electric vehicles and driverless technology. This was also the year I finally took the plunge and bought Chevy’s all-electric Bolt EV, which features a range of 248 miles per charge. Driving the Bolt for the first time was an emotional experience for me; it was like touching the future. No more gas stations, no more emissions. The clean torque of an electric engine, both whisper-quiet and instantaneous, is addictive. I will never go back.
As more cars like the Bolt EV become available, it’s exciting to see car companies in the United States once again on the forefront of innovation. Maybe one day Detroit’s beautiful, empty interstates will turn into rivers of individuated, autonomous mass transit. Everyone can read novels while they get whisked around in driverless Lyft vehicles. It sounds utopic. It also sounds sterile. Such algorithmic efficiency is the opposite of Slow Roll’s messy, collaborative, communalism.
I found myself discussing cars and community (and novels!) with Susan Murphy, the owner of Pages Bookshop on Grand River Avenue in the Grandmont-Rosedale neighborhood. Grandmont-Rosedale is a diverse enclave caught in a no man’s land: far from the bustle of downtown but still within Detroit’s city limits. In many ways, however, places like Grandmont-Rosedale are the heart of Detroit. The neighborhood has managed to resist the wide-scale blight that affected many of the surrounding areas in part because of an active community organization, the Grandmont Rosedale Development Corporation (G.R.D.C.), which helps organize a local farmers market, repairs dilapidated housing stock and provides assistance and retail space to small businesses like Pages.
Ms. Murphy’s shop is cozy and curated; it’s one of those magical places where you want to linger for hours. Pip, the resident black-and-white feline, prowled the new fiction section as Ms. Murphy described the challenges of running an independent bookshop perched on the edge of Grand River Avenue, one of Detroit’s many four-lane corridors that cars often use as their own private Grand Prix. These roads were designed to get drivers out to the suburbs as quickly as possible. They were not designed to create urban communities.
“It’s difficult to get people to stop,” Ms. Murphy said. “We have to get creative with our programming. But the community here has been so supportive. This is a neighborhood of readers.” She is hopeful that Detroit Vegan Soul, opening next door, will create a critical mass of foot traffic, the beginning of a movement: BBQ tofu and Elena Ferrante. The G.R.D.C. is also in ongoing conversation with the city about small but powerful infrastructural changes like traffic-calming curb extensions, raised crosswalks, or grassy medians that will encourage people to slow down and perhaps even buy a book.
SUCH STRUCTURAL REIMAGINING seems important to making Detroit more people and environmentally friendly. A 21st-century city now incorporates rainwater catchment gardens and solar parks and car-charging stations into its designs. But again and again I came up against this idea that true urban sustainability cannot be about infrastructure alone. True sustainability is dependent upon people.
The good news is that Detroiters are perhaps Detroit’s greatest asset. They have never stopped innovating and caring, and nowhere is this more evident than in the vast proliferation of urban gardens and farms that dot the city’s landscape.
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Cynthia Davis, owner of Sha La Cynt, a local vegan dessert company, putting the finishing touches on her pop-up store in downtown Detroit. Credit: Sean Proctor for The New York Times
In many ways, Detroit seems ideal for such an urban agricultural revolution: What better way to activate those 40 square miles of vacant lots than to turn them into farmland? If you visit the vast farmers market in Eastern Market on weekends you will find a cornucopia of local produce from some of the city’s 1,400 gardens and farms.
For Malik Yakini, executive director of the Detroit Black Community Food Security Network, urban agriculture cannot simply be about profits; it must be an act of social justice. Mr. Yakini founded D-Town Farm, a seven-acre farm near Grandmont-Rosedale, as an education center to teach children about self-empowerment, food production and environmental stewardship, with a particular emphasis on African traditions of planting and harvest.
I visited D-Town Farm on a dense, humid day in July. Mr. Yakini was busy mowing the fields. “Give me a second,” he said. “You can go to work if you’d like.” I joined a University of Michigan masters student and a farmer named Babatunde as they thinned tiny corn sprouts. There is something instantly gratifying about plunging your hands into soil still cool from the night. With a simple touch I had made contact with the food chain.
“It’s about food sovereignty,” Mr. Yakini said when he finished mowing. “Many people in this city don’t have access to fresh food. They aren’t in control of the food-delivery systems. We’re trying to hand that back to people.” As part of this hand back, D-Town has plans of opening the Detroit Food Commons, an ambitious development that will include a co-op grocery store, a community incubator kitchen and a lecture hall. These are the future palaces of the food sovereign.
RecoveryPark, on Detroit’s East Side, provides another model of urban farming entirely. The farm is in an area that was particularly hard hit by the city’s downturn. There are more vacant lots than houses.
“We found that in order to be profitable you really need at least 10 acres,” said Gary Wozniak, RecoveryPark’s founder. “You need to go large scale.” To this end, RecoveryPark has purchased or acquired over 400 parcels of land, totaling about 60 acres in all. They are essentially a commercial farm that just happens to be in a city. A key component of RecoveryPark’s mission is to offer jobs and training to addicts and those in recovery programs who would otherwise struggle to find work.
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Malik Yakini, executive director of the Detroit Black Community Food Security Network, founded D-Town Farm. Credit: Tony Cenicola/The New York Times
“We’re in this for the long term,” Mr. Wozniak said. “In Detroit, you have to be.”
On paper, RecoveryPark’s business plan is a thing of beauty, a potentially unprecedented model of urban farming. But looking over the vast expansion plans of commercial greenhouses, hoop houses and indoor tilapia farms, I found myself wondering: Can we still call this an urban neighborhood? It’s like a Zen koan: If you plop a 60-acre farm in the middle of a city, is it still a city? Where are the sidewalks? Where are the places for casual contact?
ON MY LAST VISIT to Detroit in July, I stayed at the Ark, one of the more unusual places I’ve ever found on Airbnb. It’s a solar-powered shipping container shack in the middle of an urban farm called Food Field. The farm, run by Noah Link, stands on the site of an abandoned convent. There’s an orchard of fruit trees and emus perambulate right out your back door. Food Field has an on-site farm stand and sells to a range of Detroit institutions including the chic Selden Standard restaurant and the Detroit Zen Center.
At the Ark, everything is off-grid. The solar panels feed a limited bank of batteries, and so I became profoundly aware of my electrical usage. A box fan, when left on, would cut out in the middle of the night. I would sweat and curse the simultaneous hipness and impermeability of shipping container shacks until the roosters roused me at dawn.
The Ark, for all of its lumps, strikes me as a wonderfully adaptive place — Noah supplants his farm income as a host for out-of-town guests and these guests are in turn introduced to the infectious, survivalist spirit of Detroit. The Ark, like the city itself, is not always comfortable, but it is an experience you will never forget.
As I was leaving the Ark for the airport, my phone beeped. It was Ben Wolf, the shipping container fabricator. He had forgotten to tell me about his next project. He was working with a Shakespearean enthusiast to build a mobile, three-story Globe Theater completely out of repurposed shipping containers. They were going to tour the theater around the city, performing Shakespeare’s complete works for the masses.
“Wow,” I said. “All the world’s a stage.’
I had no doubt such a dream was possible. In Detroit — that fair city rising from the night sky — all dreams are possible.
If You Go
Detroit is buzzing these days. Here are a few suggestions about where to stay and eat as you take in this city on the rise.
Where to Stay
El Moore is a beautifully restored sustainable urban lodge with a range of accommodations, including chic eco-cabins on the roof.
Detroit Foundation Hotel is an upscale boutique property in the former headquarters of the Detroit Fire Department.
Where to Eat
Selden Standard is a chic midtown farm-to-table destination.
Detroit Vegan Soul offers new takes on old soul.
Kuzzo’s Chicken & Waffles is a great neighborhood spot in the up-and-coming Livernois corridor.
Russell Street Deli, a mainstay in Eastern Market, serves dangerously delicious soups.
Wright & Company is a new center of Detroit mixology.
Reif Larsen is the author of the novels “I Am Radar” and “The Selected Works of T. S. Spivet.”
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edglings · 7 years ago
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The first big trial over worker rights in the "gig economy" begins today, and it could answer fundamental questions about how workers in the digital age should be treated, as well as what kinds of benefits, breaks, and pay they're entitled to.
The case that's beginning right now doesn't have a big-name, deep-pocketed defendant like Uber. Rather, the case is the lesser-known Lawson v. Grubhub. Plaintiff Raef Lawson sued Grubhub in 2015, claiming he wasn't properly paid for his work while driving around delivering food for Grubhub. If Lawson was an employee, he'd be eligible for benefits like insurance, unemployment, and reimbursement for expenses like gas and phone bills. He'd have to be paid at least minimum wage and get state-mandated breaks. Lawson was fired from Grubhub because, the company said, he didn't adequately respond to delivery requests.
Lawson can only seek damages, like back pay and additional penalties, for himself. His request to make the case a class action was denied by US Magistrate Judge Jacqueline Scott Corley. Even if Lawson wins a complete victory, it's hardly enough to make much difference to a company like Grubhub, which is becoming a growing force in the food-delivery space and announced last month that it will purchase Yelp's Eat24 service.
The case is bigger than Lawson, though. Whatever precedent is set will make a big difference for Grubhub and other gig economy giants going forward. Lawson is seeking damages under a state law known as the Private Attorneys General Act, or PAGA. That law can result in high financial penalties for violations, but it only applies to employees, not contractors.
If Lawson's quest for additional pay and benefits succeeds, others will surely follow, and the "gig economy" companies could be facing additional hundreds of millions in expenses. If he fails, this new breed of employers will be able to take a tougher stand on their employment rules and will be less likely to budge in the face of worker legal claims.
I don’t agree about the ‘first big trial’ line -- what about the Seattle Uber drivers case? Still, could be an important case.
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shirlleycoyle · 4 years ago
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Proposition 22 Passes, But Uber and Lyft Are Only Delaying the Inevitable
On Tuesday night, Californians voted to pass Proposition 22, a ballot measure supported by app-based gig companies that exempts them from reclassifying their workers as employees.
Companies including Uber, Lyft, Instacart, Postmates, and more, spent big to convince voters to approve the measure. The company-funded Yes on Proposition 22 campaign spent over $200 million (including millions in donations to the California GOP), deployed a record number of lobbyists, and spread waves of misleading political mailers. At the same time, Uber’s and Lyft’s chief executives undertook a media tour featuring threats to exit the state and repeatedly attempted to exempt themselves in California’s courts. The campaign bought  digital, television, radio, and billboard ads, and also sponsored academic research Meanwhile, delivery drivers were forced to use Yes on Proposition 22-branded packaging while the apps themselves told users to vote yes. 
On the other side of the issue was a grassroots campaign run by driver advocacy groups and organized labor, which spent just over $20 million. 
“We're disappointed in tonight's outcome, especially because this campaign's success is based on lies and fear-mongering. Companies shouldn't be able to buy elections,” Gig Workers Rising, a California-based driver advocacy group said in a press release early Wednesday morning. “But we're still dedicated to our cause and ready to continue our fight. Gig work is real work, and gigi workers deserve fair and transparent pay, along with proper labor protections.”
As news of the results broke, Uber CEO Dara Khosrowshahi took to Twitter to show his excitement and shared a tweet from early Uber investor Jason Calacanis calling Assemblywoman Lorena S Gonzalez, the author of AB5, a "grifter" who "failed to hand gig workers over to big-money unions".
After some time, Khosrowshahi reversed the retweet and instead emailed drivers a more subdued message celebrating that the "future of independent work is more secure because so many drivers like you spoke up and made your voice heard—and voters across the state listened."
This is undoubtedly a victory for capital over labor, and one that will likely allow the unprofitable gig economy to continue limping along at the expense of workers. It does not, however, change the reality that the “gig” business model is doomed in the long-term.
For years, gig companies have misclassified employees as independent contractors—a legal distinction that has allowed unprofitable enterprises to avoid expensive labor costs such as a minimum wage, health insurance, and safe working conditions, among other benefits of employment. Proposition 22 was cooked up to undo Assembly Bill 5 (AB5), a California law that codified an "ABC test" to determine if a worker was independently contracted or employed by a company and which went into effect in January.
After AB5 went into effect, attorneys for some of California’s largest cities, along with the state’s attorney general, then filed suits demanding an end to app-based gig company worker misclassification. Uber and Lyft have waged the main legal battle, but lost the case and every appeal since, making Proposition 22 a make-or-break measure.
"Prop 22 means I get no workers' compensation, no disability, no sick pay, it would be touch and go for me," Mekela Edwards, an Oakland-based Uber driver who hasn't worked since March because COVID-19 poses a high health risk to her. "I have to ask how long my unemployment will last, how long I'll have before I'm forced to go back out there and work. I don't want to imagine it, I can't imagine being forced to choose between my health and making a living."
Hundreds of thousands of people work for the gig companies behind Proposition 22 and many have been devastated by the COVID-19 recession. Still, this has not stopped the gig companies from threatening to take drastic measures if they’re not allowed to have their way. Over the past few months, Uber and Lyft in particular have threatened to radically downsize where service is offered, fire most of their drivers, radically restructure into a franchise model, or leave the state entirely, if Proposition 22 fails.
California voting Yes on Prop 22—which includes fine print that any changes to it must be passed with a seven-eighths majority in the state’s legislature—is a huge setback for labor. It will trap hundreds of thousands of workers under a permanent misclassification scheme that rewards a racist business model that disproportionately hurts Black and brown workers. Despite all this, Proposition 22 is not the final say on this matter in the U.S. or internationally.
AB5 clones are being considered in New York and New Jersey, while Massachusetts’ Attorney General has already sued Uber and Lyft to reclassify drivers in the state. Despite objections from Uber’s and Lyft’s impressive lobbying operations, the PRO Act—which would grant gig workers the right to collectively bargain, as part of a massive overhaul of labor law—has passed in the House.
“This is really a story about the kind of cities we are building,” Katie Wells, a researcher at Georgetown University told Motherboard. “The kind of cities—the kind of world we've built—it has allowed these entities to come in and build up a workforce through an extractive and predatory system. Regulators have to keep that in mind.”
Outside of the U.S., the global 2019 strike on the day of Uber’s public offering has been followed by successive waves. Over the summer, thousands of delivery workers organized militant strikes and protests in Brazil, Mexico, Chile, Argentina, and Ecuador targeting Uber Eats and other exploitative food delivery apps. These have been joined by even more strikes and protests in Nigeria, France, and India. At the same time, Uber is losing legal challenges in France, Britain, Canada, Italy, where high courts have either outright ruled Uber drivers are employees or have opened the door to lawsuits reclassifying them as such.
Governments across the world are also beginning to push Uber to pay billions in taxes that it has evaded over the past decade. In Britain, Uber will have to pay £1.5 billion ($1.9 billion) in unpaid value-added taxes it avoided by exploiting a legal loophole. In the U.S., Uber has dodged billions in taxes and wage claims through misclassification: in New Jersey it owes over $650 million in taxes, while in California drivers have filed $1.3 billion in wage claims against Uber and Lyft.
Since Uber’s only hope for survival lies in misclassifying workers and labor law, though, it won’t give up the billions to be made both domestically and globally (even if at a loss) without a fight. 
"There's a lesson here for workers of all sectors, beyond classification: companies are willing to spend massive amounts of money to take away their rights," said Jerome Gage, a Lyft driver and organizer with Mobile Workers Alliance. "It's incredibly important for workers to organize to protect themselves, to protect upward mobility, a minimum wage, sick leave, healthcare—to roll back a century of basic protections that try and keep Americans out of poverty."
Proposition 22’s victory, however, can’t obscure the fact that these companies are doomed. Even with a wage guarantee that effectively pays $5.64 an hour, the companies are no closer to sustainably achieving profitability than they were yesterday. Overcrowded markets for ride-hailing and food delivery, along with vicious price wars and poor unit economics meant there was never any real hope of achieving a monopoly, erecting barriers to market entry, and raising prices to levels that, for many of these companies, would yield their first ever profits. 
There’s good news for investors, however, who will finally begin to see returns on investments that have long been underwater thanks to massively inflated valuations that have tumbled in public markets. Indeed, share prices for Uber and Lyft soared in premarket trading on Wednesday morning. 
For workers, though, things will be bad. It is hard to imagine how hundreds of thousands of workers earning wages just under half of the minimum wage will be able to feed themselves, maintain housing, afford medical care, or otherwise make ends meet, especially under the boot of a pandemic and with no hope of government aid until next year.
Localities, cities, states, and countries will have to begin cooperating if they’re to have any hope of weathering the storm. They’ll need to start being aggressive, experimenting with ways they can outright take over the platforms or prohibit companies from providing the service to begin with—all while figuring out ways to expand mass transit so that not only they’re not only meeting the needs of people who need transportation, both those who worked for app-based ride-hail companies previously.
For the sake of maintaining an illusion that they’ll one day be profitable, gig companies have waged war in California at great expense to their workers, the public, and employees in other industries whose employers may grow emboldened this moment. The fight is far from over, and there is hope for labor in the continuing coordination of driver advocates, regulators, and legislators around the world, but it will get messy as likely to harken a period of unprecedented social unrest among increasingly immiserated gig workers.
"Beyond California, we need to strike early and strike quickly to ensure swift defeat to this idea that you can change the basic nature of employment and deny benefits to your employees,” Gage told Motherboard. “I ask people not involved to try and understand the labor movement in your area. Reach out to unions and ask how you can help volunteers…Get involved with and spread the world—[money] can buy misinformation and it can deceive, but it can't beat the solidarity between two workers or between human beings.”
Proposition 22 Passes, But Uber and Lyft Are Only Delaying the Inevitable syndicated from https://triviaqaweb.wordpress.com/feed/
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shirlleycoyle · 4 years ago
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Airports Have Failed to Provide Clean Bathrooms for Uber Drivers
In 2017, it looked like Uber and Lyft drivers might finally gain access to bathrooms at St. Louis Lambert International Airport.
In a rare move, Uber—which has repeatedly come under scrutiny for skimping on basic amenities for its workers—told the airport it was willing to pay for drivers to use customer bathrooms in the parking lot where shuttle buses picked up travelers, according to emails from August 2017 obtained by Motherboard through a public records request.
In one email exchange, the airport’s leadership pushed back against that proposal and another suggested by Uber to bring in portable bathrooms.
“I don’t like the idea of having them use the facility as I think it would become a nightmare….depending on what they are willing to pay it might be ‘possible’ but that is a big if,” the St. Louis airport director, Rhonda K. Hamm-Niebruegge, wrote in an email.
“I don’t think the look of portable toilets is what we are going for, even on an economy parking lot,” property division manager of the airport, Robert Salarano, wrote in the same email thread.
“[Uber and Lyft being responsible] for their own porta potty would be ideal,” Ronald Stella, the airport’s deputy director, wrote. “We should just keep them out of sight as much as feasible.”
None of the plans ever came to fruition, and three years later, Uber and Lyft drivers still do not have anywhere to pee at Missouri’s largest airport. Instead, drivers use the bathroom at nearby gas stations, an Uber driver in St. Louis and the airport’s public information officer told Motherboard.
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St. Louis Lambert International Airport
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The lack of bathroom access for Uber and Lyft drivers at St. Louis’s airport is emblematic of a nationwide problem that has surfaced as ride-hailing platforms have rapidly expanded into every major commercial airport in the country, leading to massive driver-led campaigns for bathroom access at Los Angeles International Airport and New York City’s JFK Airport.
Public records obtained by Motherboard from four of the nation’s 50 largest airports paint a grim picture: Airports aren’t equipped for Uber and Lyft drivers, and no one wants to pay for new restrooms or to maintain existing ones. The working conditions of rideshare drivers appear to be rarely considered, and when they are, they are treated as afterthoughts or nuisances. In at least once case at San Francisco International Airport, one of the busiest in the country, officials took punitive measures against drivers by removing hand washing stations with running water and replacing them with less effective hand sanitizer stations.
Years of shift manager reports and emails obtained by Motherboard show that drivers frequently complain about clogged up porta-potties, missing toilet seat covers and hand sanitizer, and broken hand-washing stations at San Francisco’s airport.
Last year, in a move that dismayed drivers, the airport replaced hand-washing stations for drivers with hand sanitizer, which is notably less effective. “Drivers often use the water and paper towels to clean their cars instead of washing their hands,” a San Francisco airport transportation planner wrote in an email, explaining the switch.
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San Francisco International Airport
In late February, an Uber driver complained to the airport, the San Francisco’s mayor’s office and the Department of Health about the risks of removing hand washing stations during a pandemic, and Motherboard reported on the issue. "I find it hard to understand why we can not have the sinks. It is still very unsanitary," he wrote to airport leadership. Eventually, the airport returned the sinks.
“The bathrooms at San Francisco airport are filthy. Sometimes the [toilets] are almost filled to the top, and there’s usually no water to wash your hands,” another Uber driver in San Francisco who wished to remain anonymous because he feared retaliation, told Motherboard of his experiences at the airport this July. “I carry my own water and sanitizer.”
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Work orders from San Diego International Airport, obtained by Motherboard through public record requests, include complaints about water pooling out of porta-potties, overflowing trash, leaking sinks, and “strong odors.”
These issues raise the question of who bears the responsibility of paying for clean and safe bathrooms for drivers: airports or rideshare companies. Federal law requires employers to provide at least one bathroom for every 15 or so employees, but this access does not extend to gig workers including Uber and Lyft drivers, who are independent contractors.
Matt Wing, an Uber spokesperson, told Motherboard the rideshare giant has never paid for airport bathrooms for its drivers at any US airports, though it has built bathrooms for Uber drivers at three airports in Canada. Instead it pays indirectly through trip fees, leaving it up to airports to decide “what facilities to provide and how to maintain them.”
“Uber contributes per trip fees to more than 200 airports annually in the US,” Wing told Motherboard. “In 2019, that was a total of $300 million in fees of which more than $30 million went to LAX. Airports spend these funds on costs associated with rideshare operations including restrooms for drivers as well as in some cases additional facilities such as prayer rooms.”
A spokesperson for Lyft told Motherboard, “Airports are solely responsible for the maintenance of facilities for TNC drivers. Funds from airport trip fees that are remitted to the airport are designated for this purpose.”
But as documents show, airports are failing to provide these basic amenities. In February, Motherboard reported that Los Angeles International Airport, which previously gave thousands of drivers access to six “foul-smelling and fly-ridden” porta-potties, agreed to add three new units, only after 2,000 rideshare drivers signed onto a letter “demanding safe and hygienic bathrooms.” For years, drivers at New York City’s JFK did not have access to bathrooms: the parking lot for drivers was described as a “wasteland of pee bottles.”
As a point of comparison, major airports in San Francisco, Los Angeles, and New York City did not accommodate taxi cab drivers with clean, safe bathrooms until they organized in the 1990s and early 2000s.
Veena Dubal, a gig economy expert and law professor at the University of California at Hastings, told Motherboard that Uber should bear the burden of ensuring drivers have access to bathrooms, particularly in California where the state attorney general is suing Uber for misclassifying drivers as contractors. By classifying drivers as independent contractors, Uber and other gig economy companies avoid providing workers with basic rights and protections such as worker’s compensation, health insurance, unemployment benefits, and bathrooms.
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Lack of access to clean, safe bathrooms has been a consistent issue for Uber and Lyft drivers since the inception of the de rideshare apps, and has only worsened during the pandemic, when many businesses have closed their doors to gig workers. Uber has also been known to discriminate against drivers at its driver support centers, or so-called Greenlight Hubs, offering more expensive porta-potties for employees and inferior ones to drivers.
“Uber and Lyft don’t want to bear the responsibility for providing drivers with bathrooms because it indicates that they have much more power in the workplace than they want,” Dubal said. “It’s not in their interest to invest in infrastructure for drivers. But at the same time, they’re pushing public-private partnerships with cities all around the country. It’s hypocritical for them not to provide infrastructure for drivers.”
Airports Have Failed to Provide Clean Bathrooms for Uber Drivers syndicated from https://triviaqaweb.wordpress.com/feed/
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brajeshupadhyay · 4 years ago
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If there were any doubt that California Atty. Gen. Xavier Becerra and his fellow regulators were getting fed up with the continued flouting by Uber and Lyft of the state’s new gig worker law, it was dispelled by their recent legal motion to force the companies into compliance. In their June 24 filing, Becerra and the city attorneys of Los Angeles, San Diego and San Francisco asked a state judge in San Francisco to issue a preliminary injunction ordering the companies to immediately classify their drivers as employees rather than independent contractors. That’s what’s required by the state’s gig worker law, known as AB 5. “It’s time for Uber and Lyft to own up to their responsibilities and the people who make them successful: their workers,” Becerra said the day the motion was filed. After eight years of looking the other way, California officials are finally enforcing the rule of law against these so-called gig companies. Veena Dubal, UC Hastings School of Law It should surprise no one that Uber, Lyft and other gig economy companies see it differently and are girding for a fight — including a multimillion-dollar ballot initiative campaign — in which their survival may be at stake. Designated as independent contractors, drivers are unprotected by minimum wage and overtime rules, receive no workers’ compensation or unemployment insurance benefits, and have to pay for their own gas, insurance, vehicle maintenance and Social Security taxes. They have no right to join or organize into a union. The dodge of designating employees as independent contractors isn’t new. It was born in the notoriously anti-labor Taft-Hartley amendments of 1947, which first carved out the exception. But it has become common in an entrepreneurial economy in which high start-up costs prompt business owners to search out savings in a marketplace in which “employment taxes and other workplace liabilities appear to be low-hanging fruit,” as Elizabeth J. Kennedy of Loyola University in Maryland has observed. Uber, Lyft and other gig economy companies have exploited America’s lax workplace regulations to build businesses addicted to forcing the cost of business onto the shoulders of essential workers. Even so, it’s unclear that their exploitation of workers has yielded a sustainable business model. Uber and Lyft acknowledge in financial disclosures that they might never become profitable under current circumstances and that things would become worse if they had to classify their drivers as employees. (Uber has lost $15.7 billion and Lyft $4.2 billion in the last three calendar years.) Becerra’s action — the latest chess move in a lawsuit he originally filed May 22 — is just one of several prongs California officials have aimed against gig employers over alleged misclassification of employees in recent weeks. San Francisco Dist. Atty. Chesa Boudin sued the delivery service DoorDash on June 16 for classifying its delivery workers as independent contractors. One week earlier, the California Public Utilities Commission, which had carved out a special regulatory designation for “transportation network companies,” informed the companies that as of last Jan. 1 their drivers “are presumed to be employees” and advised that the law requires them to provide the drivers with workers compensation benefits starting July 1. Today my office initiated a lawsuit against @doordash for illegally misclassifying employees as independent contractors. “I assure you this is just the first step among many to fight for worker safety and equal enforcement of the law”#PromisesKept https://t.co/srO3agGWTa — Chesa Boudin 博徹思 (@chesaboudin) June 16, 2020 Becerra’s action has been lauded as an overdue initiative to protect workers’ rights. “After eight years of looking the other way, California officials are finally enforcing the rule of law against these so-called gig companies,” Veena Dubal, a labor law expert at UC’s Hastings School of Law, told me. “Because regulators chose not to enforce existing labor laws against the companies, they were allowed to grow precarious work — not just in this state, but all over the world.” This isn’t a one-sided battle. The companies are fighting Becerra’s lawsuit and, perhaps more consequentially, have placed a measure on the November ballot to overturn AB 5. Their measure, which will appear as Proposition 22, would effectively designate app-based drivers such as those working for Uber and Lyft permanently as independent contractors and forbid the state or localities to enact ordinances to treat them as employees. The companies have provided the initiative campaign with a war chest of $110 million so far — $30 million each from Uber, Lyft and DoorDash and $10 million each from Postmates and Instacart, two other delivery services. So it behooves us to take a closer look at the measure. Proposition 22 attempts to establish a new workplace model — a hybrid of the independent contractor and employment models. The companies say it would preserve the “flexibility” to set one’s own work days and hours they say is valued by drivers who wish to work around school, caregiving and other work, while guaranteeing minimum pay and access to health coverage. The measure would guarantee drivers earnings of at least 120% of prevailing hourly minimum wages, a subsidy for health coverage and protection against arbitrary firing. The companies maintain that the vast majority of their drivers favor remaining independent contractors. Yet that’s misleading because drivers fall into two discrete camps. One is composed of true part-timers who record minimal hours, often abandon the work entirely after a few months, and appreciated the vaunted flexibility. The other is full-time drivers who may be spending 40 to 50 hours a week on the road. Some 70% to 80% of drivers may drive 20 hours a week or less, says Harry Campbell, a former driver for Uber and Lyft who now runs therideshareguy blog, an information service for drivers. Full-timers, while less numerous, account for more than 50% of the hours worked through the companies’ app. “For a majority of the drivers this isn’t a full-time income, so it shouldn’t be shocking that they want to stay independent contractors,” Campbell says. “But the drivers working 40 to 50 hours a week are basically working like employees without any of the benefits or protections. They’re the ones spearheading the effort to hold the companies accountable to treat drivers like employees.” And they’re the drivers who would bear the brunt of the changes wrought by Proposition 22. Campbell says, however, that when even part-timers become educated about what AB 5 would do for them and that the law wouldn’t prevent the companies from allowing them some of the flexibility they crave, “some of them change their opinion of the law.” There can be no doubt that the principal beneficiaries of Proposition 22 would be the companies themselves. If they were forced to classify their drivers as employees, according to the state’s nonpartisan Legislative Analyst’s Office, the resulting higher costs would “decrease these companies’ long-term profitability, which could reduce these companies’ stock market values and stock prices.” The measure would impose some new costs on the companies, but those costs would probably be “minor,” the Legislative Analyst’s Office reckons. Indeed, the compensation and benefits the companies would pay under Proposition 22 would fall far short of the costs their drivers must shoulder. The UC Berkeley Labor Center estimated in October that 120% of the California hourly minimum wage of $13 in 2021, or $15.60, would effectively shrink to $5.64 an hour because of provisions in the initiative. For example, drivers would be paid only for “engaged” time, from when they are en route to pick up a passenger or delivery to when they drop off the rider or package, not for waiting time between assignments. That constitutes as much a one-third of their work time, Berkeley estimated, reducing the $15.60 to only $10.45. Some drivers would gain from a stipend of up to about $367 a month for health insurance, which could be applied to Affordable Care Act plans from Covered California or other plans. But that would be granted only to drivers averaging 25 engaged hours a week or more. Those with 15 to 25 hours would receive half as much, and those with fewer than 15 hours would receive nothing. “The vast majority of drivers would not qualify” for the benefit, Berkeley says. Uber and Lyft have chosen to emphasize the purported consequences of enforcing AB 5, rather than the plain facts of their labor relationships. They , paint a picture of an army of disenfranchised drivers cast aside and unable to ply their trade. They even hint that AB 5 could put them out of business entirely. Stacey Wells, a spokeswoman for the Proposition 22 campaign, said that if the initiative fails the companies might have to pare their driver ranks, which number as many as 400,000 in California, by as much as 90% to accommodate the added costs of treating drivers as employees. Yet by any reasonable definition, the companies’ drivers are employees. According to rules set down by the California Supreme Court in a 2018 decision and codified in AB 5, businesses must consider workers employees unless they can meet a three-part test showing that the workers are free from the control and direction of the hiring business, that they’re performing work outside the normal course of the hirer’s business, and they customarily work independently in the same trade or occupation as the work they’re doing. UC Berkeley calculates that hidden costs would reduce the minimum earnings guaranteed drivers by Uber and Lyft in Proposition 22 by nearly two-thirds. (UC Berkeley Labor Center) Becerra maintains that Uber and Lyft can’t meet any of those elements. The drivers are engaged in the companies’ main business of transportation; their compensation is set by the companies, which can change it unilaterally; their performance is monitored by the companies; with the exception of the choice of the hours they wish to drive, all other terms and conditions of their work are set by the companies. Uber and Lyft have maintained from the start that they’re exempt from AB 5 because they’re not really transportation companies, merely purveyors of the software that drivers and passengers use to arrange rides. Some courts have dismissed that argument out of hand — “Uber simply would not be a viable business entity without its drivers,” U.S. District Judge Edward M. Chen of San Francisco declared in 2015. Over the next few months, as the state lawsuit progresses through the courts and election day draws nigh, the survival of the gig companies’ business model will be put to the test. It should not be overlooked how much that model depends on exploiting workers. “The initiative would codify terrifyingly low labor standards into law,” Dubal says, “undoing over a century of norms around a living wage and safety net protections for workers.” That’s true. The power of workers to ensure decent working conditions has been on the decline in America for more than half a century. Proposition 22 would hasten the slide. window.fbAsyncInit = function() { FB.init({ appId : '119932621434123', xfbml : true, version : 'v2.9' }); }; (function(d, s, id){ var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) {return;} js = d.createElement(s); js.id = id; js.src = "https://ift.tt/1sGOfhN"; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk')); The post Michael Hiltzik: Uber, Lyft face a gig labor law reckoning appeared first on Sansaar Times.
http://sansaartimes.blogspot.com/2020/07/michael-hiltzik-uber-lyft-face-gig.html
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