Uber loses New Zealand appeal, court rules drivers are employees not contractors
nzherald.co.nzEmployees might not get to claim the cost of their car (loan and depreciation), but contractors will. Healthcare doesn't come into it, NZ has government provided healthcare.
While you don't get vacation, you get to claim a lot of expenses.
In New Zealand, it's pretty much "at-will" anyways, with the cost of removing an employee typically being 3-months wages.
Personally, being a contractor was much more profitable than being an employee, even if I was on the same wage.
> In New Zealand, it's pretty much "at-will" anyways, with the cost of removing an employee typically being 3-months wages.
No way. Removing an employee in NZ (other than for redundancy) requires a series of warnings about performance and assistance to said employee each time to get their shit together. It takes months, is easy to get wrong by missing some step, and it's nothing whatsoever like "at-will".
I left a job in large part due to the fact that they couldn't get rid of our incompetent tester.
We really need it to be easier to get rid of idiots in positions too technical for them to understand.
That's what the initial probationary period is for.
And it's clearly an insufficient protection.
I see it as bad management or bad HR.
Redundancy may be the method they implied. I've seen it happen to my partner and several colleagues. It's laughable how easy it seems to tailor a redundancy to 1 or a few specific people, and the cost of fighting it is not worth it.
Faux redundancy is indeed a tool that can be used by smaller NZ employers. It's risky though for bigger companies to try it and it would never work for the homogeneous group that is Uber drivers, since they all effectively fill a single identical role, and redundancy must be about the role, not the person(s) filling it.
In this particular case I think this might be a bit of a red-herring discussion for Uber. I doubt they care about the drivers for reasons that aren't legitimate for firing them. For example, if the driver isn't getting enough rides to justify paying them they probably are redundant.
But performance seems like a very easy thing for Uber to measure, which, according to this thread, is an allowable reason for termination?
Redundancy is complicated as well - it places burdens on hiring new people in the same position.
So if you want to remove an incompetent to replace them with someone useful, you cannot do it with a redundancy.
In New Zealand it's illegal to make someone redundant and then hire back someone into the same position for at least six months. You don't make a person redundant, you make a role redundant. This would be hard for Uber to do with drivers.
When I was following these things, if you end up in employment court, the typical penalty was 3 months wages.
That could be so for first offences but I would imagine any business flouting the law and making repeated appearances in the employment court would experience escalating punishments.
Citation needed for New Zealand being pretty much 'at will'. Especially for large companies.
From https://www.employment.govt.nz/ending-employment/dismissal
If an employer wants to dismiss an employee (end their employment), they must: * act in good faith * have a good reason
Redundancy would cost three months reasons and Uber would be required Uber to argue, not that the person doing a job isn't a worthy employee, but that the role they perform shouldn't exist in the company anymore – a hard argument for Uber to make about their drivers I imagine.
> NZ has government provided healthcare.
Which contractors have to pay for through ACC levies.
ACC levies in NZ pay for no-fault accident insurance - it's paid in part by taxpayers, and (for industrial accidents) paid for by employers (companies that employ coal miners pay more than companies that employ programmers).
Our public health system (hospitals, doctors, etc) are different and is largely paid for from income tax (lower than many states in the US, 10% lower marginal rate than I was paying in CA).
Yea it's very different to the US, and it's much much cheaper than what people in the US would think when they think about paying health insurance, but contractors do generally need to pay ACC levies still. Flat rate is a little over 1%, and for high risk industries you would generally pay more.
https://www.acc.co.nz/for-business/understanding-levies-if-y...
> If you’re self-employed, a shareholder-employee or a contractor you’ll pay three different levies
> NZ has government provided healthcare.
We really don't. You won't be bankrupted by hospital bills, but the absolute shambles that we're working with is far from an adequately functioning healthcare system.
The ACC (which is meant to cover injuries) often refuses to help, sets impossible burdens of proof, or provides completely inadequate compensation.
And they've only gotten worse since covid (their website still says they require you to be fully vaccinated to visit them - even if you're visiting due to a vaccine injury).
> NZ has government provided healthcare. We really don't. You won't be bankrupted by hospital bills, but the absolute shambles that we're working with is far from an adequately functioning healthcare system.
We do have it though, and it works, though it's not perfect. Wait times are definitely long unless you go private, but the public system has helped me many times. I've not had to deal with ACC, so I can't speak to that.
In practice if you work for a good company you often get health insurance included or at a discount (at least all the software companies I've worked for have done this), so you get a mix of public/private healthcare and that works pretty decent.
I can't imagine the stress of the nightmare inducing hospital bills you hear about in the US.
My experience with ACC (broken achilles full reconstruction, 3 operations in the private system and physio, 80% salary for time off) has only been positive - I know some people have a different experience but IMHO when it works it works really well
When it works sure, but too often the system is adversarial and the behaviour more in line with what you'd see from a private insurer - as opposed to a government entity acting for the good of the people.
How much time do you book keeping to claim all of that?
There is a model where a driver picks up the uber app and drives a couple times a month because it's a way to earn beer money once in a while. What percentage of trips do we think are driven by drivers like this? I bet a small percentage, maybe less than 1%.
Once a driver starts driving more than 30 hours a week for Uber, they're effectively Uber Drivers, and the employment concept starts to make sense.
This is probably simmilar to what happened with AirBnb - in the beginning it was about renting your house from time to time. Nowadays, it's mostly professionals who own / manage several properties which are exclusively being rented on Airbnb.
I rented an Airbnb in downtown Lisbon some years ago (2016 perhaps?), and was actually welcomed by the owning company's MD who told me they'd purchased _75_ apartments in and around Bairro Alto in the year leading up to my stay. The unpreparedness of legislation was wild.
I wouldn't mind a platform that tries to bring back the old model - perhaps by limiting the amount of time a property can be made available, or something along those lines?
Kindred is an attempt at that: https://livekindred.com/.
> more than 30 hours a week for Uber, they're effectively Uber Drivers
Every Uber driver I've ever had also did Lyft and would go with whichever was paying better or more active or would get them where they needed to be at the time. So even if they're driving 30 hours a week, that time is split between two companies.
One of my Uber drivers just drove during school hours as he dropped his grandchildren off at school and then picked them up at the end of the day.
But nearly all my Uber drivers have been immigrants working full time or more.
The issue with this is that it's illegal in a bunch of places.
I would love to drive for Uber when I have a bit of free time, but I'd need a licence from my local authority, and taxi insurance which is unrealistically expensive to obtain on a ride by ride basis.
The primary "innovation" of Uber is political, not technological. They've managed to circumvent labor protections and at the same time position themselves as the middleman between drivers and riders.
In another Universe, a technology company would develop software that taxi companies can use to provide the same services that Uber does. But that wouldn't be as profitable as there wouldn't be scope for labor exploitation.
In this other universe, would the entrenched taxi operators willingly embrace new technology such as this, rather than continuing to provide a sub-par experience enabled by their entrenched position & political lobbying? Because that certainly didn't happen in this universe.
Taxi "companies" were also political innovations, where the medallion system kept supply far below demand and prevented any kind of meaningful competition, allowing drivers free reign to play games like "my cc machine is broken" or "i don't take rides to that destination"
Uber drivers themselves never seem to complain about this. It's almost like those labor protections come with a bunch of other baggage that makes the tradeoff not worth it to them. Of course, it's easy to explain away any perceived 'tradeoffs' with them just being too stupid to know better, but I don't think that's accurate.
There's a lot of Uber drivers in NZ who did complain about this. It's the reason for the court case that the article is about
Concretely, "a lot" in this court case is "4".
Do we have a strong reason to believe that the number of disgruntled drivers is significantly higher in NZ than in other countries? This wouldn't be the first time a few disgruntled people got a government to "fix" a system that the vast majority felt was working fine for them.
> Uber drivers themselves never seem to complain about this
why would they? uber takes more money from the customers than taxis got in the past, pay less to the drivers and less taxes. Everybody pays for uber benefit
Most people don't like being underpaid.
Obviously nobody wants to be underpaid, but not everyone wants to be employee-level on the clock for uber the entire time they're logged in and taking offers.
Moderate disagree. It connects drives with riders much better than before, making taxis viable outside urban cores. There are numerous stories of "try hailing/calling a cab in X scenario" where cabs just wouldn't show up.
The innovation you mention also varies by jurisdiction. In some places, Uber's are licensed taxis, so clearly there's more than just breaking the medallion monopoly.
Sort of like this?: https://drivers.coop/
"We are a driver-owned cooperative in New York City specializing in paratransit and Non-Emergency Medical Transportation."
Like Curb and the numerous taxi specific apps?
Something that has been baffling me is how Uber is not in panic mode and it's market price not affected by Waymo?
I've always been skeptical [of self driving] but at this point (after having a few rides with Waymo) it appears that the folks at Alphabet have figured it out already and are coming for Uber. Why is not that affecting Uber's price?
One question I would ask is how fast is Waymo growing? At this stage isn't it too early to comment on the viability? Concerns around safety may take a decade of safe riding/data to come down. Also, when you talk about Uber's stock price - Uber may not only be restricting itself to retail use cases but UberFreight could be a big market as well. In the logistics space too, adoption of self-driving may be slower than in retail is what I suspect.
Also, on an apples-to-apples basis, ~46% of Uber's revenue comes from markets outside the US where self-driving is yet to go through its own motions, regulatory approvals, local dynamics, learning (see how autos drive in subcontinent), etc.
Waymo is growing incredibly fast (from 2 days ago, nearly 100k trips per week with exponential growth) https://www.reddit.com/r/SelfDrivingCars/comments/1ezysb5/wa...
Waymo is far from a full rollout across the US, let alone the world. That’s why.
Waymo is only testing in 4 cities. Market share is barely scratching the surface. Maybe in a decade, it will be viable replacement.
How lucky for Uber that driving in the rest of the world is fundamentally different than driving in the 4 Waymo test cities.
Legal frameworks and social acceptance of technology are fundamentally though.
And illegal human driven taxis are very different from robot driven unoccupied taxis. First one was existing phenomenon not in big scale that occasionally got handled.
Later one is very visible and scary one.
Good point.
Waymo has zero presence in the vast majority of the United States and nowhere internationally. Meanwhile, "uber" is a verb and noun like Kleenex. And even if in ten years Waymo displaces Uber for transit, Uber will be dominant in food and grocery delivery.
Like if you don't live in the Bay Area or one of the very few places outside it where Waymo has been testing, people have never heard of it.
Basically, Uber is everywhere and Waymo is nowhere. Uber achieved dominance by rapidly scaling and being able to fight regulation with venture capital. Waymo hasn't been able to do that anywhere.
Google is risk-averse. There is no real incentive for its management to be aggressive. Even with the Gemini AI, they only acted after being pushed around by OpenAI.
You need someone ruthless and aggressive at the top, like Travis Kalanick, Jeff Bezos, Elon Musk or Steve Jobs who basically stop at nothing. Folks who act fast and can take big decisions. MBA business types often get caught up in endless meetings, prevaricating over inessential things.
How many cities is Uber in? How many cities is Waymo in? That's why
If they were in all cities already Uber would be dead. But someone, either Uber or market is not even reacting to this inevitability?
The time horizon on Waymo getting there is quite long. Uber is in every city because they don't have to build and maintain their own fleet. Waymo will have to. That's not only a massive capital cost, but a substantial scaling problem.
Because there's two decades of revenue between that happening and today.
It's far more likely that Uber buys Waymo than Waymo replacing Uber.
Uber is going to be a front end to Cruise.
That'd be another reason for market to react? If Uber becomes a front end to Cruise/Waymo, their price should still be massively impacted as those are the ones with the moat and Uber won't be getting nowhere near the same cut from each ride?
New Zealand (where I live) has changed the law before to make employees contractors because of either corruption or economic necessity depending on which side of the fence you stand
Weta Digital had people building models on "at will" contracts and not paid very much. They were working on a film for Warner Brothers (if memory serves, I am not looking this up)
A contractor was fired and took a case that since they: worked only for Weta, only on Weta equipment, and for all the working hours there were for Weta they were an employee of Weta (that is the law here - until then)
The employee won.
Peter Jackson and Richard Taylor are very rich, very entitled, and Warner threatened to throw their toys across the room and the government changed the law so that any artist, or computer programmer working on a movie or a computer game had no employment rights....
I doubt that will happen this time. I do not think Uber wants to pay enough.
Between this and the Australian government's ruling on after-hours emails, seems like ANZAC countries still maintain worker's rights.
I'm surprised, and somewhat disappointed, that no state/country has created a formal third class of worker. There's obviously some type of gig-worker role that is neither employee nor contractor.
This is really good. Quite a lot of 'disruptive' business lately are actually just going around the laws, and sometimes borderline exploiting people.
From my experience, in big cities, Deliveroo and similar apps riders are mostly half legal young immigrants not realizing (at first) that they are being exploited and that they take quite some work risks without any coverage at all. But hey, at least we can have a Big Mac delivered to one's door for almost nothing.
That is something the government could fix by requiring these companies to check the applicants are permitted in the country through some government supplied means.
What is a 'half legal' immigrant?
Likely in the country legally, but not on a visa that allows them to work in the country.
You really think Uber's success was simply "just going around the laws"?
They were, here's a starter
https://en.m.wikipedia.org/wiki/Controversies_surrounding_Ub...
There is a "just" word in my question you decided to ignore.
Uber drivers, by any reasonable standard, are contractors not employees. Uber does not, to the best of my knowledge, tell them when or where to drive nor does it force them to pick up passengers. That's the distinction between contractor and employee.
Declaring Uber drivers to be employees seems to be a political move, likely lobbied for by low wage employers that are being forced to offer higher wages because many of their former minimum wage employees are now contractors for apps.
I live in NZ - these unions are very much NOT working for employers
There's a long history of "Baptists and bootleggers"[0] pushing for regulations that serve both of their interests. The term comes from the 2 main groups that advocated for laws against the sale of alcohol in the southern US. The unions can easily be secretly in cahoots with McDonald's or the taxi industry.
Its also clearly not just something they're pushing in New Zealand given that California voters had to overturn a similar state law via referendum[1] a few years ago. They did this by a 17 point margin at the same time that they voted for the left wing candidate for president by around a 30 point margin[2]. In virtually any other state in the US, declaring Uber drivers to be "employees" would almost certainly lose at the polls by a much larger margin.
[0]: https://en.wikipedia.org/wiki/Bootleggers_and_Baptists
[1]: https://en.wikipedia.org/wiki/2020_California_Proposition_22
[2]: https://en.wikipedia.org/wiki/2020_California_elections#Pres...