Businesses want more profit. Consumers want to pay less. Workers want to earn more. Pretty much always.
This doesn't always result in an optimal outcome. Market power, externalities, information asymmetry, etc.
This is why we have regulations. Forcing the society and Uber to pay for drivers to be treated as employees seems like a very reasonable outcome. If they don't like it they can hire less drivers, but the ones that remain will at least have some minimum standard of living that developed countries pride themselves for.
Which is a perfectly reasonable position whether or not someone agrees in this particular case. We have lots of laws that, for some combination of good and bad reasons, keep services from being as cheap as they might otherwise be.
I have trouble being upset that fewer people will want to afford higher Uber prices. People managed before Uber and it's mostly a luxury good anyway. To be honest, when Uber's management changed, the sensible thing--VC money notwithstanding--would have been to start pricing the service at what it cost.
The biggest difference in the US is that "treated like an employee" also means being paid a minimum wage. As an employee in the United States, your employer is also responsible for paying a portion of your social security and medicare taxes, and for making sure taxes are properly withheld from your paycheck.
Even before the gig economy became a big deal, businesses like yoga studios would attempt to classify their skilled teachers as independent contractors so they could pay them well below minimum wage, but take away their ability to teach at the location if they taught somewhere else as well. Hair salons and yoga studios sometimes go so far as to charge their independent contractors rent, which would make sense if these people were truly renting the space and could freely take their clients elsewhere, but these businesses also frequently limit the contractors' ability to collect personal contact information.
When I volunteered to help people with their taxes, a large number of Uber/Lyft/DoorDash/etc. drivers were surprised to learn that not only did they have to pay large amounts of income tax that would usually be automatically deducted from their pay check, but they also had to pay double the social security and medicare taxes because they had to pay the employer and the employee portions. Companies that classify their workers as independent contractors in this way are taking advantage of the fact it can take people up to a year to realize that taxes and car maintenance will take what little income they have made.
> Companies that classify their workers as independent contractors in this way are taking advantage of the fact it can take people up to a year to realize that taxes and car maintenance will take what little income they have made.
When I drove pizza delivery, I discovered car maintenance took what little income I made. I was a W2 employee, paid less than minimum wage, because I earned tips. Independent contractor status isn't the only method for surprising people.
I take issue with the paternalistic idea that an employee is more deserving than other types of people. The commenter above said, "This is why we have regulations." I interpreted that as beginning a discussion of what regulations we should have. If that was incorrect, I'm sorry for causing confusion. If that was the intent, then I'll reassert that focusing myopically on the distinction between an employee and a contractor is ignoring much better solutions.
No, it just means that contractors are treated as businesses rather than as people, because that's what contractor status is for.
If you hire a company to fix your car or build you a shack, they are not your employee, they are your contractor. You are not responsible for their healthcare or minimum wage or sick days. They are a business, they provide healthcare and all that stuff to their own employees who actually do the work. And this is perfectly fine, everyone ends up happy.
The problem is when individuals try to be a business, working as independent contractors. There is no "minimum profit" similar to "minimum wage", and you are essentially your own employer. Government can't force you to pay yourself minimum wage as a business owner because you'll be able to fudge it easily if you wanted to, being both the employer and employee.
What the government can do however is disallow corporations from hiring contractors for roles and in situations where in reality the contractors are businesses only on paper, where they actually are functionally just employees, like in Uber's case.
Would it be great if healthcare was paid by income taxes rather than employer? Yes, but since we don't have it yet, and since there are other issues differentiating employees from contractors / businesses, this seems like a decent approach.
tl;dr - "employees" enjoy a lot of benefits & protections, both legally required and provided by their employer, that non-employees (like contractors) simply don't have.
That's the current legal definition. But since we're talking about changing the law, our concepts aren't constrained by current law. I'm asking about the concept, not the law.
This doesn't always result in an optimal outcome. Market power, externalities, information asymmetry, etc.
This is why we have regulations. Forcing the society and Uber to pay for drivers to be treated as employees seems like a very reasonable outcome. If they don't like it they can hire less drivers, but the ones that remain will at least have some minimum standard of living that developed countries pride themselves for.