Lyft Settles Worker Classification Lawsuit for $12.25M (opens in new tab)

Portion of payroll taxes is ~7.5%, plus an extra 2.5-10% for workers comp/etc depending on your rates.

If they had to reclass as employees, they would just raise prices to end consumer 10-20% to compensate (or fund it via other's money like they're doing now to price out rest of market).

They'd also put a cap on hours per week so drivers couldn't drive more than 30 hours per week. Companies aren't legally required to give benefits to part-time workers (up to 30 hours).

The big draw of independent contractors is that you've just converted labor from a fixed cost to a variable cost. There are tons of Uber/Lyft drivers (namely, anyone not doing it full-time, which is the majority of drivers) who prefer this since they can drive as much or as little as they want.

>They also avoid paying their portion of the payroll taxes,

No, they don't. They might avoid being assessed the payroll tax, but the economic incidence (the reduction in purchasing power after prices have adjusted in light of the taxes) is, per a well known result, independent of who assess the tax on, and completely dependent on the shape of the supply/demand curves.[1]

"Making" employers "contribute" half of FICA is just a shell game. If (on normal employees) you made employers pay all of it, they would (likewise) just cut wages by the exact same amount, as everyone's after-tax income would remain the same and no one would have reason to deviate.

[1] https://en.wikipedia.org/wiki/Tax_incidence

>>The key concept is that the tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply.

It's less than perfect. People could be migrating more because lyft and über are siphoning away fares. So they go where there is money, even if it's less than historically.

Which makes me want to clarify things. Are über lyft drivers better off than yellow cabs where these platforms have not yet disrupted? In other words, are they better off on über now or yellow cab historically? The answer, I suspect, will remain the same, but its far from cut and dried, I think.

I think it's more difficult to get to the truth.

This article seems credible: https://pando.com/2015/01/09/the-hidden-cost-of-being-an-ube...

But, what it shows as the "income after op cost" isn't the real truth. That figure ($12.62/hr in Chicago, $34.04/hr in NYC) would be basically 1099 income. You would have to pay self employment tax (not trivial), and forgo whatever benefits a cab company might provide their employees.

If you look for average salary for cab drivers, and compare to the above, you would gather that cab drivers do better than Uber drivers in Chicago, but worse in NYC.

I can't find any credible sources where it seems 100% clear that the comparison is thorough, and apples to apples.

Because it forces classifying workers as either employee or contractor when a case could be made for another classification of flex-employee. So, for example a good number of über drivers are part timers, which is fine, but if this becomes a normal aspect of the economy, we need to be able to make it automatic for this class of people to get some kind of benefits. Not as much as employees, and more than [$0] as in contractors who need to do their own taxes, benefits, healthcare, etc.

Yes lower fees for drivers and passengers. Uber is wasting too much money on shtick marketing, too many managers & executives and expanding to other countries with anticompetitive laws. My approach will involve a relatively smaller operating team. We will not need 20 billion to compete directly with Uber, because our goals are different from Uber. Having Uber as a competitor provides a clear contrast for potential drivers and customers. Easier to compete when you are lean & understand the market.

Lyft already has substantially lower driver fees. At 30 hours/week it only takes 10% and at 50 hours/week it takes 0%.

That's absolutely hilarious. I love how Uber made them redact their "secret plan" for the online edition!

This is the reason for my comment, looking for like minded individuals & teams.

Not when the transfer isn't made face-to-face. And it defaults to 0. So it actually is more like "the European model".

1. The absence of tipping is a feature. Uber was originally a premium service. Many premium services explicitly discourage tipping.

2. Driver ratings replace the primary function of tipping, which is to incentivize good service and leave feedback.

That said, I very occasionally leave a tip in extraordinary circumstances, and would not be opposed to a way to do that in-app, as long as it was very clear it's not expected (hide behind 5-star rating, call it a "bonus" or something).

Ahh. Wasn't aware of that. I found a screenshot, and it's an odd, non-obvious way to allow tipping:

http://www.sarahdoody.com/wp-content/uploads/2014/03/lyft-ux...

I wonder how much that keeps it from being used.

But this suit wasn't certified as a class action. (This article doesn't get this right and didn't appear to interview the principals; here is the L.A. Times story:)

http://www.latimes.com/business/technology/la-fi-tn-lyft-set...

But it will make it more difficult to attain the important thing that was sought -- employee status and its protections. I don't see how this isn't simply a case of Liss-Riordan selling out to make sure she got her cut guaranteed, drivers be damned.

This is broadly correct. The part that preserves the rights of prospective plaintiffs to sue individually is contained in the opt-out provisions that are always a part of a class action, and involve notice and deadline requirements.

If you received a notice, and opted out, or were not sent a notice...then you aren't part of the "class".

The notice has to have an opt out procedure.

Edit: If either of the above applies, you are free to bring your own suit.

Wouldn't that only be if Lyft doesn't continue doing the same thing?

> Someone's gotta pay. Right now it's the drivers paying via not having benefits.

As a contractor you always pay for your own benefits. Every contractor does this (or chooses not to on their on volition). Every driver KNOWS they are a contractor, they should know what comes with being one, and it's no ones fault but their own if they don't.

Why should it ever have been an option for the drivers to be the ones paying?

So is it a valid claim, or not? Aside from the higher taxes to support a new program (not that the gov't doesn't already spend huge amounts in healthcare already) and the insurance industry, who loses out?