I am really curious how they arrived at any of the numbers in this article. Seriously, what other large employers make it to hundred plus million per year? Are they just up and deciding that anyone who did one trip is now an employee? Is there a source that shows how much each company pays per year in this state? who else is equivalent?
this isn't about protecting the drivers, this is about protecting the taxi industry and metropolitan mass transit unions both of which were under threat of better service being offered at lower costs both to tax payers as a whole as well as customers. you don't have to like Uber to understand what this is really about. It is protecting the current gravy train the politicians rely on to stay in office.
Unemployment Insurance, New Jersey Workforce Development and Health Care Subsidy Fund Taxes
> Employee and employer state Unemployment Insurance tax rates will apply to the first $34,400 of an employee’s earnings in 2019 (up from $33,700 in 2018).
> For 2019, employees are subject to a 0.0425% (.000425) Workforce Development Partnership Fund tax rate. The employee Unemployment Insurance tax rate remains at 0.3825% (.003825) of taxable payroll.
You make reference to protecting mass transit as well as to the cost to consumers. These arguments make sense if there are zero externalities, but unfortunately there are: carbon footprint, both directly as well as second order effects from increased congestion, commercial exploitation of subsidized infrastructure, increased collision risk to cyclists and vulnerable road users, abuse of contract law by preventing independent rate setting and concealing negotiable information, artificially depressed prices fueled by venture capital in order to create a monopoly and capitalize later. These externalities are borne by society at large, so a pure "let the consumer decide" philosophy is not fully justified in this scenario. Some of these externalities apply to taxis as well, which is precisely why regulating and limiting taxis is good, though I think one could do a lot better than the medallion system.
Taking drunks off the road, providing carpooling options, reducing need for parking, making it possible for for people to not need cars who are on the fence about buying one, frictionless payment options over cash, eliminating "zoning" by different cab entities that block off under-served neighborhoods. There are plenty of positive externalities to Uber too. I don't know about you, but I'm old enough to remember when cabs sucked and you dreaded it or considered risking just driving yourself after a night out. Uber made things easier, better, and safer.
Regulation is what made taxis so terrible. We don't need the government to control everything. Many of the externalities you describe would be the same if people just drove their own cars.
If ridesharing is so bad then govt should invest in proper public transport to create more choice, not try and crush a valuable service used by millions.
The answer to bad regulations is not necessarily no regulations. The taxi medallion system was broken and in need of an overhaul. Replacing a broken system with a ridesharing Wild West is not optimal.
I agree that there needs to be a lot more investment in mass transit but in the meantime governments shouldn't be turning a blind eye to regulating ridesharing.
Car safety = Uber knows the drivers, has real-time tracking for your entire trip, and lets you call for help quickly and silently. Taxis have none of this, and there are lots of bandit/underground cabs where you have no idea if it's legit.
Payment options/scams = Uber lets you pay however you want through the app/apple pay without any need for cash, with an upfront price. Most taxis only accept cash, have unclear pricing that you only know at the end, can easily pad the meter in various ways, and may extort you if you really need a ride.
Refusing pickups = Uber drivers don't know the destination until you get in the car, and get kicked off the network if they cancel too many rides or abuse riders. Taxis are notorious for ignoring people based on looks, destination, convenience and usually won't deal with any trip they deem is not worth their time.
The difference in service and safety is magnitudes better with ridesharing vs taxis, that's why they're so popular.
Also your Uber driver doesn't know your race when he accepts your ride or not. Which is probably why I find it a lot easier to get an Uber than a taxi.
> Also your Uber driver doesn't know your race when he accepts your ride or not. Which is probably why I find it a lot easier to get an Uber than a taxi.
Not being able to hail a cab due to racist drivers is a problem. However, in your example, the Uber driven can see your name, which is a pretty reliable proxy for your race, unless it's highly generic like John Smith or something.
Taxi drivers have to accept cash and cannot force you to pre-pay for your ride like Uber can. That at least reduces the number of drivers who would otherwise refuse to pick you up because of a perception that you wouldn't pay.
I’m no fan of unnecessary regulation, but you cannot compare externalities of driving your own car for your own purposes vs. ride share, accept in cases where people are ride share driving in the same capacity/frequency as personal driving. My opinion is that people who drive their own cars don’t do so at the same clip as people driving for money. In the former, people do so out of convenience or routine. In the latter, people do so as long as needed to meet financial obligations. Maybe I’m wrong and people are out here driving hours and hours for wages they don’t need to survive or support others.
It's the same amount of driving. The Uber drivers are giving rides to people who need to get somewhere, and who would otherwise be using their own cars or taxis.
If anything there are less total cars on the road since the same Uber driver can service many passengers (or same amount of cars delivering more people with less parking).
Perhaps government would invest in proper public transport if so many businesses weren't trying to figure out ways to avoid taxes by, say, insisting a huge number of people who contract full-time and long-term for them aren't really employees?
What taxes are being avoided? Contractors pay just as much, if not more tax. There's no magical loophole.
Also the govt is not lacking for funds. The problem is poor spending and that will never get solved by giving up even more money. I'd rather have private businesses that actually produce valuable services then wait on crappy transportation delivered a decade late by the state.
Why are they amazing? Japan has great public transportation and very dense cities. It's not as car-centric as the US but the taxi system still has similar problems.
No apps, need to communicate destination (possibly in a foreign language), primarily use cash, expensive, paper receipts, no real-time status/tracking, hard to get back lost items, etc. They might be cleaner and quieter but those are minor details.
Wrong, you can pay by many means, including the IC card, this is a good option and can be used with Apple wallet, super convenient.
Expensive
Compared to what?
Paper receipts
Not when using the app, you can just say you don't want a receipt.
No real-time status tracking
Wrong, the app does this too.
Hard to get back lost items
Call taxi company, get it back? Tokyo taxi drivers usually inspect the taxi before you get out too, I notice they do this every time I get a cab.
Another benefit IMO is there are cabs driving around everywhere, you don't have to hail and wait for a cab, if it starts raining, you can just jump into a cab usually in under a minute.
> If ridesharing is so bad then govt should invest in proper public transport to create more choice
This is an excellent idea, and is consistent with also taxing any societally borne externalities caused by ride-sharing, the primary being congestion. And taxis should be held to the same regulatory standard.
The congestion would be the same if people just drove on their own. You can see this in Los Angeles and New York. The answer to getting cars off the street (whether private or shared) is to build other options that people can use.
Taxis are cars too by the way. How did all those taxi regulations improve externalities?
> The answer to getting cars off the street (whether private or shared) is to build other options that people can use
I think we agree completely on this, and the best other options in cities are all mass transit, not individual cars.
> Taxis are cars too by the way. How did all those taxi regulations improve externalities?
Taxis didn't impose nearly the same congestion externalities as ride shares (or single occupancy cars) simply because there just weren't as many of them, due to the controversial medallion system. They were never a form of mass transit.
And as anyone who waited hours for a taxi before the ride share era knows, the lack of supply was the primary frustration with taxis. Ride share simply multiplies out the taxi technology of low occupancy cars, which while it solves the taxi supply problem increases the existing congestion problem wrought by low occupancy cars in general. Therefore it is not the way to achieve scalable transit in even somewhat dense environments.
But to your question, maybe congestion taxes on single passenger ride sharing pushes us toward a form of dispatchable mass transit which shares many of the conveniences of ride-share with the social benefits of mass transit i.e. a fleet of dispatchable municipal minibuses that work like a larger Uber Pool.
That would be especially helpful for last-mile connectivity for mass transit like commuter trains, whose parking lots are today overwhelmed by single occupancy cars.
As a user I don't care. I would rather have a transportation option than not. What do you expect millions of people to do? Either don't travel or go back to driving their own cars? What is this abstract "social good" where nobody is served and everyone is miserable?
Lack of alternatives is the problem. Externalities of Uber are nothing but political outrage and a distraction. If the govt put even a fraction of the effort in battling Uber into building more rail and bus lines then everything would be solved.
This has been proven by the massive surge in electric scooters and bike sharing companies, which Uber also provides. Are those externalities too? Or do people just want to get around and need ways to do so?
There's studies that show uber increasing congestion. It makes sense when you think about it. Uber drivers are routinely on the road with no passengers. Either waiting or driving to or from picking up a passenger.
Many of these studies are fraught with problems. The one that researched SF congestion for example almost perfectly coincides with the multi-year construction on Van Ness completely disrupting north-south traffic in the city.
You also have more and more people in every growing city supercommuting due to rising housing costs. A lot of these supercommuters are driving their own personal vehicle because they are now living in places where a personal vehicle is a necessity. Once you have your own personal vehicle for local use, it's economically advantageous to use it for commuting to work.
Given all the changes in growing cities in the past 5-10 years, you couldn't even begin to isolate the cause of congestion down to just one cause, but that's what these studies falsely claim because they don't understand the null hypothesis and that correlation does not imply causation.
Those passengers would be in a car anyway. They don't stop going places. Like I said, ridesharing either reduces cars on the road or decreases the amount of parked cars for the same amount of people.
The biggest study was in SF and was inherently flawed by looking at traffic over years. It's obvious that an increasing population will generate more traffic, and Uber has allowed more people to travel than before. Serving more people isn't a bad thing, it's a natural situation that cities should plan for instead of being constantly surprised by.
> Those passengers would be in a car anyway. They don't stop going places.
Are you sure?
100% of riders, for all rides they take, would choose to use a car if they could not use ride sharing?
Absolutely none would walk, ride a bike, take a bus, take a train, choose not to go?
I have a hard time believing that it's purely a "car I have access to or a ride share," 100% of the time. So I believe some amount of rides are happening that would not have people driving.
Of the drivers for ride sharing, there is some amount of time between trips that they are simply waiting for the next customer. This is time they wouldn't be on the road if they were not driving, and time the person who is using the ride sharing wouldn't be on the road either. So, I also believe that drivers must be on the road more often than the sum of the time they've kept other people from driving.
If drivers are on the road more with ride sharing, and if less than 100% of people using the ride sharing service would choose a method of transport other than a car, I cannot see how ride sharing wouldn't strictly require an increase in traffic?
Obviously not 100% but that would be a minority of rides. If you need a car to get to your destination then you either drive or use another car option (like Uber or taxis). Uber is too expensive (and sometimes too slow) to replace other choices for equivalent distances all the time. It's likely used in situations like rain or emergencies or something else. And people who had no options before or lacked last mile reach can now use Uber so of course there's net new riders too.
Uber will add to traffic but traffic always increases anyway. Check any city over any period of time. It's normal. Uber isn't the problem, it's the lack of capacity for a growing population and other viable transportation. For example, look at electric scooters and bikes in big cities that people are using for medium distances instead of cars. That's what happens when there's progress and competition instead of regressive regulation.
Those passengers would already have the car parked at their house, or the restaurant they were at.
The Uber driver has to drive to pick them up. Then once they drop them off, they have to drive to the next fare. Sometimes they even circle around high traffic areas in heavy traffic in order to get to customers faster.
Basically anytime you see an uber driver without a passenger is likely extra car time on the road compared to what those passengers would have done with private cars.
The externalities of driving should be and largely are paid for by fuel and plate taxes, and also tolls. If those things need to be adjusted, then adjust them. But it doesn't make sense to me to particularly punish rideshare miles driven compared to commuter miles driven.
> But it doesn't make sense to me to particularly punish rideshare miles driven compared to commuter miles driven.
I agree. We should be making it more expensive to operate any low-occupancy vehicle during peak congestion hours in congested areas, not just ride-shares.
All of those taxes are already per vehicle. The license plate tax is per vehicle. The tax paid on a gallon of gas is per vehicle. Tolls are per vehicle. There is already an embedded penalty for low occupancy because the costs are spread across fewer people. Fighting congestion is already a major cost: time. Who are you trying to decongest the roads for? How will you avoid creating a situation where only the wealthy are allowed to drive, and now all you've accomplished is making their driving experience more pleasant?
No, taxis are bad because companies try to squeeze the maximum amount of money while providing the least possible service. They could provide a good service within the term of the regulations if it were their focus.
Where I live taxis are regulated yet provide a decent/high quality of service. And it’s true even in cities like mine where the public transportation network is crap (bus based).
Taxis got away with it because there was no competition until ridesharing came around. They wouldn't have provided good service on their own when protected by laws.
Nothing has improved commercial services like competition. Nothing has ruined it like regulation. I've yet to hear how any of these externalities are solved with regulation, or how they are unique to ridesharing vs private car ownership.
> Many of the externalities you describe would be the same if people just drove their own cars.
no, this isn't correct and on its face looks like a straw man, so i'm pretty sure you're arguing in bad faith, but i'll try to give someone of the "market" mindset a market argument.
market zealots tell us that as things become cheaper, people do more of them. subsidizing ride sharing, evading regulations, etc. generally made ride sharing become a cheaper alternative to taxis. as a result, it suddenly became generally affordable for well off people to "ride share" around everywhere as a manner of commuting. this very likely led to more congestion than a world without ride sharing would have.
that some of these well off individuals could have done the same in private cars is not really relevant. ride sharing became so economical that bus riders, pedestrians and cyclists changed their behavior to make use of it. this isn't controversial - there's at least one study from SF that found this; i'm guessing other municipalities have found the same.
> no, this isn't correct and on its face looks like a straw man, so i'm pretty sure you're arguing in bad faith, but i'll try to give someone of the "market" mindset a market argument.
Please refrain from ad hominem attacks. GP has a valid point.
> ride sharing became so economical that bus riders, pedestrians and cyclists changed their behavior to make use of it.
If that is your concern, what explains popularity of Uber in London / Paris, which have excellent public transport as well as massive customer base for that public transport? Clearly, Uber is providing good value there.
I think you're reinforcing my point that existing transportations options suck, but I don't see how Uber is economical enough to compete with buses, bicycles and walking, especially if you're doing that at any regular frequency like commuting.
If you could walk somewhere then you don't need a car, but if you need a car then you weren't a pedestrian or cyclist anyway. There are also many people who didn't have any good option at all before (like kids, disabled, elderly, etc) and it's a good thing that they can get around now.
This is such a bullshit argument. What you're basically saying is people wouldn't have driven their cars and stayed at Home if Uber wasn't a thing. That's such an inane argument. Ridesharing is good and reduces overall traffic. It doesn't make people go out more than they require. No one says "it's a good day to Uber today ".
I've read a dozen studies so far that indicate Uber increases traffic and congestion in cities it operates in. Quite a lot, actually. Increasing commute times by 40% or more in some of the studies. Venture capital is paying people to idle around the city, clogging the roads. It's a sort of denial of service attack.
"Uber and Lyft Admit They're Making Traffic Worse"
This is the normal outcome of more people going to more places. Ridesharing definitely increased the total amount of people taking cars that didn't before from a lack of options, but that's minor in terms of general population growth.
Traffic always increases over time, that's a natural thing that cities need to plan for. It's great motivation to build public transportation instead of complaining about Uber helping people get around.
You didn't answer the core point. People don't sit at home if there are no taxis. That's never happened. And if cyclists take cars now, it's probably because it's safer to do so than riding around traffic. These aren't bad things.
Go back to pre-Uber. No one called expensive taxis and used private cars, including the cyclists for non trivial distances. Uber came and solved the first step. Maybe some cyclists even take it for trivial distances. But that's blaming Uber for a good product and promoting a protectionsist scheme. Rather if you want more pedestrians and cycling, have more infrastructure and incentives to promote that rather than ban Uber.
For all those downvoting ...what's the solution ? Go to phone call expensive taxis ? Uber is such a useful utility, most people won't let it go away. Too big to fail
Mass transit in most places doesn’t come out ahead even accounting for externalities. The average passenger vehicle emits 0.91 pounds of CO2 per mile. Many estimates of CO2 price it at $30/ton. At that rate, the CO2 externality from driving is 1.4 cents per mile. The cost of CO2 recapture puts a cap on the cost of CO2, and currently it’s $100-$230 per ton. At that price, we are looking at $0.10 per mile.
Uber could very easily reduce carbon emissions if they bias their payments/ride assignments towards EVs and other efficient vehicles. I'm not sure about the legality of that, but its definitely an interesting idea if they need to pull some PR shenanigans.
>Commercial exploitation of subsidized infrastructure
What makes trucking different than Uber in this scenario? Is driving my own car around not abusing the infrastructure, but hailing an Uber is? Uber doesn't make money if nobody is riding somewhere in the car, so the market forces try and make utilization as efficient as possible.
>Increased collision risk to cyclists and vulnerable road users
Are Uber drivers more likely to hit people than non Uber drivers? If you control for the population utilization of the roads, does this have a measurable affect?
>Abuse of contract law by preventing independent rate setting and concealing negotiable information
You have a point there, but personally I disagree that these should be required by law in the first place.
>Artificially depressed prices fueled by venture capital in order to create a monopoly and capitalize later
Well its doing a pretty bad job if the goal is to create monopolies. For most tech companies, they have a reasonable amount of competitors given the chicken-and-egg situation they need to solve. Prices are artificially depressed, not going to lie, but a lot of prices are artificially depressed to make them usable by the masses, and its all the better for it.
> if they bias their payments/ride assignments towards EVs and other efficient vehicles.
This happens naturally. From a previous calculation I did, I estimate that a hybrid Prius allows a full-time rideshare driver to gross more than $500 each month than a typical ICE sedan. The economics of more efficient vehicles biases drivers to get more efficient vehicles with fewer externalities. This is why Priuses and other hybrid cars are the most common vehicles used by rideshare drivers.
In my country the most common uber vehicle is a Toyota Prius which uses about 4 L per 100 kms. As our buses are poorly run and empty the majority of the time, Ubers are the optimum environmental option to get from A to B.
This must mostly be penalties for not paying any taxes for 4 years. Unemployment in New Jersey is taxed at 0.3825% of the first 34,400$ of income so it cap’s at 132$/employee per year. The other tax is uncapped but at ~1/9th the rate.
Nationwide Walmart has 2,300,000 US employees. If they are paying an average of 150$ each nation wide on similar taxes that’s 345 million per year. However, I doubt even 20 million of that is in New Jersey.
> Uber and subsidiary Rasier LLC were assessed $523 million in past-due taxes over the last four years, the state Department of Labor and Workforce Development said in a pair of letters to the companies. The rideshare businesses also are on the hook for as much as $119 million in interest and penalties on the unpaid amounts, according to other internal department documents.
Also it's unemployment + disability insurance they're being charged for.
So, that 119m should be this years penalties. If this thing is growing at over 22% per year and 4 years ago the already had a 54m unpaid tax bill, then I can see this snowballing fast.
How are they getting screwed? Drivers do it by choice, and many of them do have a full-time job or other commitment and like Uber for the flexibility. They specifically don't want a full-time driving job.
From what I've read, they often don't make enough to even cover their increased vehicle expenses. And then there's insurance exposure.
Also, TFA notes that classification of drivers as employees would increase costs by over 20%. If that's true, someone here is getting screwed. Drivers, governments, or both.
But still, I value freedom highly. So I do get the argument that people ought to have the right to work how they want. Even if they're getting screwed.
Articles are a poor source. The drivers wouldn't be driving if they weren't making any money. I've taken thousands of rides and discussed Uber with about 90% of my drivers. While they all would like to make more money (who wouldn't?), they all make a profit and enjoy the flexibility the most.
>> The drivers wouldn't be driving if they weren't making any money.
This might surprise you, but most people are absolutely terrible when it comes to making complex financial decisions involving multiple variable factors over a period of time.
The tiny percentage of ride-share drivers who do meticulously keep track of their finances have all said the same thing: at the end of the day, when you factor in everything, you barely make any money - if everything goes well.
Sure people are terrible at decisions but that doesn't mean they're all stupid. I find it hard to believe that all these drivers can't figure out their costs, and everyone I've talked to has been fine with it.
The only time I hear complaints that driving isn't worth it is specific trips with traffic or a long dead leg back home, but that's not their entire driving history.
The other possibility you are ignoring is that a lot of those drivers may be aware that they are breaking even or barely making any profit, but may be choosing to continue driving because they love driving, or they love meeting new people, or they simply want to stay busy and be out and about instead of sitting at home and getting bored/depressed.
Basically, I don't buy the "so many people wouldn't continue doing it if they weren't making good money" argument.
Do you honestly think that is the majority? That they're doing it for fun? Have you ever driven for Uber? Have you talked to drivers? Why assume they're all irrational or incapable of figuring out what their time is worth?
I have direct experience with hundreds of drivers including many students, retirees, elderly, disabled and my own friends. They all do it because they get paid.
There are thousands of other things they would rather do for fun or to stay busy, not sit in traffic to drive strangers around.
Are they pricing in vehicle wear and other long-term expenses? Many people only think of gas and other short-term expenses when they calculate vehicle cost-per-mile.
I'm not sure how things work in America, but in the UK employment does not mean or require full time work or even fixed hours. We also have a lower status of "worker" which has fewer rights / fewer responsibilities.
Do they not require independent contractors to contribute premiums for that? That's how it works here in Canada (same for mandatory pensions/"social security").
There's no escaping this from states like NJ, CA, IL, MA, and NY. These states (of which I am a member of) are broke with pension obligations waiting to bankrupt the government. Taxes are already high both on income and property so there's nowhere to go there. They have old infrastructures and although the citizens are heavily taxed, government can't make improvements in large part because of lifetime pension obligations to a rapidly growing group of retirees - many of which have already moved to tax free states like FL.
So these states are the vanguard in finding ways to collect more tax revenue any way they can. Sharing Economy companies are simply the easiest to harvest right now.
When compared to other states, CA has a middle of the road per capita budget. It's not much more than Washington - which actually has zero income tax.
CA has a high income tax rate, but property taxes aren't that high - they're pretty average for the nation. And the effective property tax rate is even lower due to prop 13. You can actually search this on many property tax websites - on average the effective tax rate for property in some counties is less than half the actual property tax rate.
California has huge budget problems whenever there is an economic downturn due to its heavy reliance on income taxes (which is due to prop 13), which is heavily reliant upon the stock market. This is why certain people love to talk about how its going to "fail" whenever this happens.
Prop 13 does California wrong on so many levels. We're sacrificing our future via the additional perverse incentives it gives for NIMBYism, and unfairly overtaxing productive citizens via the income tax. The state really needs to develop a plan to sunset it.
Property taxes turn out to be a better way for states to do the bulk of tax collection. The focus on income taxes is probably a big part of why the property values in some of Cali are so insane.
That and interest rates. As rates fall property values will rise in proportion. A home’s value is what people that want to live there are willing to pay and can afford each month. So it either goes to the bank, the owner, or the tax collector.
saying low interest rates case high property values is putting the cart before the horse, mortgages cause high home prices. You could have high interest rates, but if they gave high interest loans out like candy to anyone who wanted one, home prices would still rise.
I think it's both. Ultimitly, a home will rise in value due to a few things such as improvements, inflation, or a certain area becoming a hot/cold real estate location. However, the ultimate selling price for a home is going to be greatly affected by interest rates. We've seen it in the last year where rates have gone 1% since a year ago, you've seen houses rise in value quite a bit and in proportion to that. 1% difference on a 30 year term is pretty significant and will be noticeable on the monthly payment.
Even though some people can or do pay cash for a home, they are not a significant population. Very often people that can pay cash will make a cash bid, prove they have it and still get a mortgage because money is cheap and the opportunity cost of trading that money for a house is generally unfavorable. A home is generally a market lagging investment when considering maintenance and taxes. Throw in interest and it's a lousy investment but you can live in it so it's rational depending on your lifestyle.
What people can afford in an area they want to live is what prices homes - taxes, mortgage rates, and price combine to generate a monthly payment that people are willing to pay. That's how the market works. In some areas the price can outpace the other 2 if wages are rising, like we've seen in SV for awhile now. But that's the exception and not the rule.
Yeah I've read that CA is fairly nervous about another big tech crash as so much of their revenue right now is related to IPO's and stock awards that are worth a lot.
Yep, I think the census next year is going to hit some states hard, losing both residents, federal funds and seats. United Van Lines did a study and NJ was the top moved out state.
Not sure how you can compete with Florida though, when your state has high taxes and it's cold. If they make infomercials for both Florida and NJ or even OH... Obviously Florida would be the better choice. Warmer, less taxes, friendlier to businesses, world class cities, the top theme parks in the world, if you want to go on a cruise not that far from a port... and plus residents get discounts on theme parks even cruises. Then from my impression of places like NJ or NY people always seem in a hurry and sometimes even rude. While it seems like people from FL are more relaxed and happier.
Plus since things are less industrial and more tech or done remotely it's easy to get up and leave than before. Got a hedge fund? Relocate to FL and then fire anyone that doesn't want to move with you. Miami sounds more appealing than Wall St. to some of the change makers, plus with the wealth tax idea that's being pushed and other stuff, what's the incentive to stay when you can vote with your feet? Plus it's not like New York is it's own country, so citizens there have 49 other choices they can move to.
There was a recycling plant that had trouble getting approved in Los Angeles, even 10 years later. They relocated to Arizona and got approved in a single day. I think more people and companies should do that. Let these states lose out and fail, the states that make things better and easier will win. There CEO had much more patience than I'd have if things were moving that slow. Uhaul trucks leaving California cost more than heading back to California. So I think people are getting sick of states, and cities especially when they quit listening to people. California lessen the punishment for stealing, so more stores are being stolen from too sadly. Also they are tough on truck drivers, so some drivers rather just avoid California completely.
I've talked to a partner at an IP law firm in Austin, Texas. They do a lot of business with the tech companies like Amazon, and wanted to hire a new attorney based in SV, since most of their work is done remotely with the SV office of Amazon, even though there's a local Amazon office down the street in Austin, too.
Well, it turns out, if they'd have done so, they'd be required to pay taxes on the income of their whole partnership from most of their clients, because most of the companies they do business with are based in Cali, even though all the rest of their lawyers are based in Texas.
Guess how they decided to proceed after receiving such advice from the state?
I could forsee an outgoing pension tax. If you live in an income tax state, then you get a state tax credit for the amount, otherwise NJ collects the NJ state tax rate on pensions coming out of the state of NJ.
Looks like states can only tax the pension of people who live in their state. So work all your life in New York, earn a nice pension then move to Florida to retire then New York can no longer tax your pension.
Also in NJ, it's pretty well known that both businesses and individuals are flowing out of the state due to taxes when they are able.
The main reason my parents moved south when they retired wasn't the weather but the fact that they couldn't retire how they wanted with the property taxes in this state.
So true. My parents live in Central Jersey, and their property taxes are probably going to top $12k this year. Just like your parents, they like living in the state, but at some point the fiscal situation just won't be tenable.
No, sharing economy companies are breaking the law in interesting and creative ways and it has simply taken the states some time to catch up. That those states also have a pension obligation has nothing to do with them collecting taxes on corporations active in their territory.
Seriously. These corporations come up with all kinds of ways to not pay taxes and then people try to find a fault in the government or the system. Yet, when the government comes back to acquire those taxes, it’s still the government’s fault?
The idea that you should pay unemployment insurance and social security isn't something radical. It's the basics of how things are supposed to work across the US.
If anything, it's surprising the states are being so slow to crack down on this stuff.
Even by 2022 the NJ pension is in trouble. It's not hard to read about these as many journalists are covering the pension time bombs in numerous states. State's which happen to be some of the most taxed states in the country.
It's almost impossible for Illinois to raise new taxes. People are already fleeing the state at an impressive rate, and any tax increase will only amplify the death spiral.
We will be leaving in approx six months after having lived here for all my 48 years.
To the point that the other states are rather wealthy, yes they'll be fine.
My real question is what do these states do? Continue to raise taxes? Even the other states in question are losing high net worth tax payers to places like Nashville, Texas, Florida, Arizona, etc.
Do the just restructure in bankruptcy and leave all these people hanging who are relying on their pensions to live on?
Neither of these possible. I'm really at a loss at what these states should do.
States can't declare bankruptcy, and in the case of Illinois, public pension benefits are guaranteed by the state's constitution. I don't have an answer unfortunately, although I think often of possible solutions.
Total pension liability (from your numbers): 133.5 billion
There are 12.80 million people in Illinois, so the per-person liability is $10429
A typical pension is paid out over the course of about 20 years. The liability per person per year is $521
Put differently: the pension liability per year is 6.675 billion. Illinois rakes in about $45 billion per year in taxes.
That's at most "awkward" to handle and at best "easy" and possibly even trivial.
First, what you are doing is taking a net present value of a discounted cash flow, dividing it up into pieces and then population.
You cannot do this.
Say there is a discount rate of 8% and you owe $100 per year for 20 years. That's a NPV of about $980.
Then you say, $980 divided by 20 years is only $49! It's nothing. You just turned an obligation of $100 per year into $49 per year.
See, the pensions, when they say they have a shortfall of X, what they mean is that if they got X today, and invested it with their expected rate of return, in the future they would have what they need to pay out their obligations. They are not saying that their obligations are X when they are added together across time without discounting.
Second, in the case of pension funds, the discount rate is how much they think they can earn with the money. The pension industry has different assumed rates of return, but the most consistent one I've heard is 8%, which in today's world of secular low rates is insane. There is a whole world here of pension funds reaching for yield as risk free instruments drop to very low rates, and this is by far a much bigger impact on pensions than anything else and something not talked about when people cheer low interest rates. This is causing pension funds to be in shortfall all across the world.
There is also the issue that some pension plans contain provisions for health insurance, which is also hard to predict.
So I'm not saying I have the right number, but without knowing their discount rate or future obligations, you are not going to be able to get a good number.
Japan has a completely different pension system which is extremely conservative.
It's a two tier system, the first government funded, and of course the Japanese government is in enormous debt, but not because of pensions. The government funded pension is like welfare, it's very small, is fixed in amount for everyone, and funded by contributions. It would be what social security is if the amount was tiny -- say $200 per month -- and fixed for everyone regardless of how much they pay in, even though everyone pays in a bit less than 1% of their salary. It is a system not dependent on positive rates of return.
The second system is the main source of pensions for people and is employer/employee funded. It is also quite austere -- you pay in 18% of your income in year 1 and that amount increases by 0.25% each year. Of course only half is deducted from your paycheck, the rest from the employer, but it is effectively taken out of the worker's paycheck.
What you get when you retire is ~0.55% of your total lifetime wages each year. This amount is fixed in nominal terms -- there is no inflation, cost of living adjustment, etc. You get this fixed amount every year. That means that by design the system is solvent because even if nothing is invested and the money earns 0%, if you work for 30 years and never get a raise, you will have paid in an average of ~22% of your lifetime wages which will fund 32 years of retirement pension after 30 years of working. But a normal person will get raises, and as they get raises over time, they earn more later in life when their percentage contribution goes up, so pensions are well funded even for a population with long lifespans and low interest rates. Then of course people have private savings in addition to pensions.
Needless to say, Americans would riot if you told them they need to increase their social security contribution from 15% to 18%, with no cap, and that this amount goes up every year, and then what they get would be only 0.55% of their lifetime earnings with no COLA. That means someone earning the median per-capita income of about 31K for 40 years of work would get $570 per month in social security benefits after paying in an average of $594 per month over 40 years. But again, our system is designed for people who die younger and work in an economy with decent rates of return.
But if we adopted a Japanese style system, social security would be permanently in the black regardless of interest rates.
So does that mean the average retired Japanese person is living on less than $1k per month?? How are they doing that? Isn't Japan pretty Urban and the cities relatively expensive to live in?
You would be surprised at how low wages are in Japan and how frugal people are to save to supplement their employer pensions. You would also be surprised at how many poor people there are in Japan. The stereotypical wealthy Japanese salaryman has pretty low salaries by American standards. There are also homeless people in Tokyo who sleep quietly in the streets and then clean up after themselves, disappearing completely from sight so you wouldn't know there was an encampment there. There was one famous case of an older person starving in Japan. He had a very touching diary where he wrote he dreamed of eating just one rice ball. He went to the unemployment office but they turned him down.(source: https://asiancorrespondent.com/2012/02/starving-to-death-in-...)
In Japan 2/3 of the average person's retirement income is pension benefits and 1/3 is savings, so Japanese augment their frugal pensions by saving a lot. Even so, 1 in 6 Japanese live in poverty, and 1 in 5 seniors live in poverty, suggesting that the low pensions play a role and that some Japanese are suffering because of this (https://www.japantimes.co.jp/news/2019/06/04/business/financ...)
Private consumption in Japan, as a share of GDP, is about 10% less than in the U.S. E.g. they consume about 57% of GDP and we consume about 67% of GDP. This includes consumption of fixed capital. If you back that out, the median Japanese household is just much more frugal than the median US household, and it's not all increased out of pocket healthcare spending (source: https://www.bls.gov/opub/btn/volume-6/how-do-united-states-c...). They really are more frugal and more risk averse than US households.
In the U.S. 9% of seniors live in poverty compared to 13% of the population (and 18% of children). Social Security not only does a fantastic job of keeping seniors out of poverty, but for many seniors who lived in poverty before the age of 65, the receipt of social security benefits lifts them out of poverty in their old age.
Thus, social security is much more than a pension program, it's actually a significant transfer that causes seniors to have lower poverty rates than working-age Americans.
Surely not. Being 15% underwater on bills is not easy to recover from. That $45 billion is already used up. You can't just get 7 billion of it every year back. That's humongous!
And because the underfundedness compounds (if you have less capital, then you fall farther behind because your growth is on your capital being as projected), they're in real trouble.
Conservative talking points flow pretty directly from the facts when it comes to Illinois, and public pensions in general.
It's widely acknowledged that most states' assessments of their own unfunded liabilities are borderline fabrications, because they assume unrealistic rates of return. Illinois assumes 6.75-7.25% rates of return on pension investments. The average discount rate for corporate pension plans is under 4% (and even with that low discount rate, they're 90% funded on average): https://www.pionline.com/article/20180430/PRINT/180439976/20....
Is it possible to sue pension plans to force them to assume a more realistic rate of return? To do otherwise is to allow a fraud to continue (overinflated return estimates, causing even further insolvency in the future when those returns don't materialize).
Most of them have adjusted the expectations for returns for any new participants.
Reducing expectations for existing participants is the same as defaulting on a loan, and I see no reason for why pensioners should be getting haircuts, while lenders get every penny they are owed.
1) Pensioner debt in Illinois is about $250 billion, versus $65 billion for other kinds of debt. Any debt restructuring will necessarily have to see pensioners carry most of the water.
2) Defaulting on loans makes it very difficult to access the capital markets for things current and future residents need. (Long term bonds to pay for transit projects, etc.) Cutting pension obligations doesn’t have that problem.
> 1) Pensioner debt in Illinois is about $250 billion, versus $65 billion for other kinds of debt. Any debt restructuring will necessarily have to see pensioners carry most of the water.
So make both pensioners, and lenders share the pain. Don't just dump all the problems onto one or the other. It was the lender's fault for not taking into account the possibility of default of a creditor with large outstanding financial obligations.
His point is if you make the lenders take a haircut you end up having to pay much higher interest rates when you borrow. Just like how if I default on my credit card, my next one will have a much higher interest rate.
I'm not suggesting pensioners take a haircut, but that pension plans need to be forced to shore up their funds sooner rather than later, with taxes instead of borrowing (kicking the can even further down the road). It's the uncertainty that is the issue IMHO.
I've actually researched them a fair amount for a course I teach on Fake News at a local college. They have a bit of hyperbole in their pronouncements but are generally factually quite spot on. They do not generally misuse statistics or engage in misleading presentations of data sources. To date, I have not been able to not find a reputable original source or citation for what they claim.
While that may be true, the governments have a consistent track record of using assumption that understate pension costs and a track record of underfunding the pensions. History has shown that one would be more accurate if they erred on the side that calculated higher costs, especially since they can kick the can down the road for so long.
The states won't be bankrupted. Just a greater and greater portion of tax revenue will go towards paying for debt, which means less for investments for the future, so current and future taxpayers will take a hit to quality of life compared to better managed states (all else being equal).
Not sure how taxes are "already high" on property in CA when we have an absurd voter-passed amendment that specifically locks property taxes very low (prop 13).
Jersey City just had a public referendum on short-term rentals that AirBnB spent millions of dollars lobbying against. It's good to see that the both the public and its elected officials are coming up to speed on the realities companies like Uber and AirBnb force upon them by skirting the law.
These are the same elected officials who let taxi companies rip off passengers for the better part of a century by limiting competition through the medallion system, and protect hotel interests because they’ve been able to tack a ton of extra taxes onto every hotel bill?
Before the smartphone era, the only possible way to ensure availability of personal transportation was to have a functioning taxi & livery industry. The use of medallions was actually to protect the public, ensuring all drivers were at least accountable and traceable and thus somewhat safe, just like today's Uber riders expect the company to perform background checks on drivers. Yes it benefitted embedded interests, but eliminating medallions would have been worse.
Also, tacking on taxes to hotel bills hurts them, by making visits more expensive and thus reducing demand.
If "protecting the public" was truly the goal, why not make taxi driving as simple as getting a commercial endorsement on your license? Driving 50 people in a public bus only requires X hours in a classroom and an extra exam (or two, depending). Interestingly, the medallions were affixed the the vehicle (thus allowing anybody to use it), the total number of medallions were artificially limited and the choice parts of the city were off limits to competition. Does that really protect the public or does it just protect those who own the medallions?
You should look at the history of why taxi regulation came about and why the "right" number of taxi badges per city was a system that much of the world arrived at. It also brought minimum service obligations, driver standards and fair pricing.
Deregulated taxis had cartels, increased and varying prices depending on destination and poorer customer service. Bad enough that many countries and cities found they had to regulate.
Now, whether medallions that are separate from vehicle and driver, and thus have a value in their own right are the best way to regulate is another question entirely. In the US specific case it seems emphatically not. Quite why many US cities had such poor taxi service when other countries have managed much better is beyond me.
If you want to argue with the phrase "protect the public," that's fine. The point is that, pre-smartphones, the medallion system ensures a functioning system, a modicum of safety, no fare surprises. It was not intended to produce the _lowest possible fares_ for riders.
>The public hasn’t fared much better. Deep-pocketed medallion owners have hijacked public policy through lobbying and legal challenges. Just last week medallion owners won a legal victory blocking Mayor Bloomberg’s plan to create a fleet of “green cabs” to serve New York’s outer boroughs, and last year medallion owners successfully stymied New York’s attempt to shift to hybrid taxis.
Just one example in the article of the great protection medallions offered.
This is like the shoe shine boy giving stock tips in 1929, or the stripper with 6 houses in 2008 -- it represents the exact moment of "peak taxicab." Every major point in the story is now invalidated:
Taxi emissions have been reduced dramatically:
"The scientists report that overall fuel efficiency of the medallion taxi fleet climbed from 15.7 to 33.1 mpg, and corresponding estimates of nitric oxide (NO) and total particulate (PMT) exhaust emissions declined by 82% and 49%, respectively."
https://www.greencarcongress.com/2019/05/20190530-taxis.html
Nobody claims the medallion system was perfect, or that owners did not attempt to exploit their value. But it did provide a functioning cab network that was safe and predictable for decades. And despite holdign a lot of power, medallion owners are not immune from government regulations and competition aided by technology.
> But it did provide a functioning cab network that was safe and predictable for decades.
I don't even know what world you're describing right now. With issues like "the credit card machine is down" to a cab never showing up despite how many calls I made.. the last word I'd ever use to describe cabs is "predictable." Even today, post-Uber.
Taxis have hacked meters forever, take longer routes, and 'forget to turn on the meter' or the 'meter is broken' even today. There's a reason taxis have a fixed fare to manhattan from the airport.
These talking points died in 2016. Now that Uber isn't subsidizing rides with investor's money and raised their fares, Uber is actually more expensive than taxis in NJ.
There's no reason ride hailing companies need to violate labor laws to do business.
Uber started in San Francisco. You could not get a cab on the weekend for any amount of $. You could not get a cab to come to the "tough" neighborhoods. This is 100% fact. I once called 4x and was told one was coming - falsely (I did live in what was then a "bad" neighborhood). My roommate walked across the entire city.
Uber started with licensed transit vehicles - now called uber black. It was only when other folks started doing private party cars that they copied that with UberX (oddly they briefly had some moves towards pushing for enforcement against the unlicensed folks but saw that customers didn't care).
But the underlying issues - incredibly bad service (talking on phone, smoking, credit card machine "broken") and lack of availability - despite the industry being "regulated" were VERY real. That's what got them going.
The other reality - they have FORCED the taxi industry to up their game. You can almost always now pay with credit cards in a taxi, you can call a taxi with an app, you can sometimes even review your taxi driver.
I called maybe 20x before "getting" it - the taxi is coming was 100% a lie. They were very likely redlining where I lived.
I paid happily for uber black when it came out - whatever people think of uber costs now - original uber was NOT cheaper than a taxi as I remember - BUT you could actually get it. But I might be wrong - for me, I just wanted to be able to get something so I could avoid owning a car (most of the time bus etc works but not always).
I'm more concerned by the divide in status companies like Uber incur among workers than the comfort of the taxi clients, which by the way is a transportation mode only a select few can afford to use frequently.
Source? At EWR a few weeks ago while waiting for luggage, I wandered over to the taxi stand. The quoted fare (there was no line, by the way) was twice that of either Uber or Lyft to the same destination.
Were you going to NYC (or anywhere in NY)? NY and NJ do not have a reciprocity agreement, so taxis from NYC are allowed to charge 2x the fare between NYC and EWR and the same for NJ taxis to NYC. Uber/Lyft can pickup / dropoff in either state and don't appear to operate under the same restrictions.
LAX to downtown: Uber and Lyft are cheaper in the middle of the day between lunch and the evening rush hour, and again after 9 or 10p M-Th.
Early morning through rush hour, and evening rush hour: 2-5x more expensive than a cab, depending on surge pricing.
Holidays: 3-20x more expensive than a cab, depending on surge. I have seen multiple Uber and Lyft fares that would have cost more than the plane ticket did.
You can walk out of LAX? Safely? I didn't think the entry road had sidewalks. Or is there some other route?
And, given that those hotels have shuttles, why would you walk? Just take the hotel's bus. (Or are you feeling that that's not cool, because you're going there not to stay there, but just to take an Uber?)
On the lower level, Century Blvd has a sidewalk and crosswalks on the north side of the road. I walked it with my wife just two months ago, although not to catch an Uber, but instead to get our car from long term parking.
Because, in my limited memory, I didn't remember there being a sidewalk from LAX to, say, Century outside the airport. I don't have a problem with walking that far. I have a problem with walking that far, in traffic, when I don't remember there being a sidewalk. I had assumed that there wasn't one.
For example, walking into SLC airport is not trivial to do. It's designed to be driven to, and that only (or, now you can take the train). I mean, you can walk along the bike trail from the southeast corner of the airport, then work your way through the parking lots of the air cargo places, but I don't think there's a sidewalk from the bike trail to the terminal. And that's the best walking option at SLC.
[Edit: A bit of time in Google Maps shows a sidewalk the majority of the way in SLC, but not all of it.]
I commute in NJ and used ride hailing apps until it was just cheaper to use taxis. I wouldn't use any liaison service at an airport, they're going to charge an arm and a leg for the purported convenience.
Edit: I'm not doxxing myself, sorry. I'm within commuting distance of NYC.
But we can't classify them as employees and have Uber's current driver experience, they would have to regulate their drivers more like a normal taxi service due to minimum wage laws and fixed overhead per employee.
The official election results put it at 86% (46,062) in favor of the regulations (voted 'Yes' for public question #1).
Even more interesting is the number of 'No' votes (7,416) is less than the number of signatures on the petition that forced the ordinance into a public referendum (~20,000 with ~9,000 certified).
well preying on ignorance is the game of politicians and they won. Yes I am saying it was a loss for the rest of us.
why? politicians and their allies successfully portrayed the home sharing industry as the reason for rising rents when in fact it has long been because politicians and those using their connections which have been the cause. oh they hide it well but the idea is to keep their investments up and keep "those" people out. Those people being any group which they don't want to see where they live.
If you got this far, good for you. Are there bad actors in the home sharing space. Yes, however you target them more directly but the restriction of requiring owners to be on site during the rental period severely limits the rights of the good ones.
so yes there is some regulation needed but if it does not protect the little guy, and they weren't in this as they got rolled in with the rest, then it harms us all as whole.
rents won't go down until more units are built and they won't be built for the same reasons they were not being built before home sharing industries showed up at the door.
You can blame some conspiracy theory involving politicians colluding to trick their constituents, or you can listen to the lived experiences of residents in Jersey City that have to live next to nuisance short-term rentals.
Parties all night during the week, drunk people trying to enter the wrong apartments at 3AM, arguments between loud tourists in your once quiet building, and somehow sleeping 10 people in a two bedroom apartment.
I don't blame residents for not wanting to live and work around that everyday. Most people don't want to live in flop houses.
I think there already are laws against these kind of actions. Punish directly the ones that are wrong. The whole planet should not have to suffer because someone made a scandal at 3AM.
I think it's perfectly reasonable for people to not want their apartment building to become a hotel.
I agree more units need to be built and development should be encouraged. Given a referendum I'd vote against allowing short term rentals not because I'm nervous they raise rents but because I don't want my building to be a hotel.
I'm not saying I disagree but I think a referendum vote is fine. Everyone has a chance to give their opinion then we count the votes and choose the will of the people. The property owner does have certain privileges as they should but renting is a 2-way relationship and tenants should have a voice in how their community operates.
So although I generally agree with your line of thought, I disagree in this instance.
The difference is that AirBnB makes lives of the neighbors much worse. Is a parasitic business model. Uber just allows for deals between drivers and customers which a lot of people like. Let's have referendum on Uber and see what the results are before lumping those companies together.
As a user of AirBnB accross Europe I did not make anyone's life worse. This is quite an offense. Are there bad people? Sure. But punish them directly. We already have laws for anti-social acts.
If these Uber drivers were correctly reporting their income (and I can't see how they wouldn't be--Uber surely 1099s it) -- wouldn't each individual driver be paying these same taxes, even as a self-employed person? The self-employed pay into Social Security for both their portion and the employer's portion, this also includes SSDI. I'm not sure how NJ does their state tax calculation.
Is the limited-liability corporation that Uber uses called "Raiser LLC" or "Rasier LLC"? I swear I've seen it spelled both ways, although only "Rasier" in Uber receipts.
Both, although it's possible it's only "Raiser" in some locales[1] as a typo — Uber's liability insurance paperwork[2] and site[3] refer exclusively to "Rasier".
Ok, is it just cynical of me to say "Ok, here is their 'one time expense' for this quarter to show why they aren't profitable yet?
That said, the company has so much regulatory risk associated with it. It has the feel that the "system" is working very hard to punish the "disrupter" in a fatal way to discourage other such disrupters.
I'm not sure why people think that drivers for Uber & Lyft shouldn't be treated as "contractors". I know I'm in the minority on this, but to me it seems that you can jump in and out of employment with Uber & Lyft quite easily, to the point that it does seem more like contract work.
As an anecdote, I took a Lyft to the airport with someone who had stopped driving for 6 months in order to get started with a new full time job, and had just started driving again to pick up a little more cash on the side. No full time employer would tolerate a 6 month break to start up another job, and then allow you to come back.
In my book, if you can't determine the price for your service, you aren't a contractor, pure and simple. Uber determines the rates, sets their fees, supplies the clients, and has rules about how many times you can skip/pass on choosing to accept a fare. Uber basically controls every aspect of the entire process but let's people choose when they want to work. That "benefit" is thrown out to drivers so that Uber can try to claim they are "contractors" because they can choose when to work. I don't think that should be the only test - and for the states that have rules on how to define such things, most of them do not have that as the only test. Plus, I work for a large corporation and there are salaried people here who choose when to work and when not to work. Mostly the sales team than anyone else but it definitely exists. Similar story for real estate agents, financial planners and investment managers, etc. They are usually salaried employees of a firm who can set their own hours.
Maybe the answer is that they are neither contractors nor employees in the traditionally-understood form.
But the criteria have to make sense in the context of the law. For instance, "unemployment" doesn't make much sense in the context of a driver who works for Uber and Lyft. And "minimum wage" doesn't make sense if the drivers are able to decline or cancel a request.
So can you be more specific about what aspects of employment should apply to an Uber driver?
In the UK we have "employee", "worker" and "self employed" basically. They define different rights for the worker, if the company wants more control it moves things towards employee. If they want fewer responsibilities then they have to give up some control (e.g. disciplinary procedures, setting the price, etc)
> Uber basically controls every aspect of the entire process but let's people choose when they want to work.
No, the main benefit is that Uber doesn't choose who can drive, anyone can sign up and start driving. I don't see how you can classify them as employees without Uber having any selection criteria at all for the drivers except that they have a valid drivers licence.
The workers choose to work at Uber, Uber didn't choose to employ the workers since Uber is open for all.
Don't you start driving before you get a drivers rating? So it is not a blocker for you to start working there. After that isn't the drivers rating just a way for riders to kick misbehaving drivers off the platform? So it is the riders who fire the drivers, not Uber.
I used to teach snowboarding as a contractor and had no choice over the price of my services. The resort set the price and I had to either accept or not work with them.
Your conclusion presupposes that the employee/contractor dichotomy is a useful construct in its typical form.
But the current dichotomy limits the freedom of individuals to contract out their labor on terms that work form them. It replaces the free choice of individuals with the "wisdom" of bureaucrats and politicians.
The taxi analogy isn't the same. The rates are being set by the local government, not some non-government third-party whom they work with like perhaps the people who actually own the medallions (most are loaned out) or the people who lease out usage of the vehicles, etc. If those places were setting rates on what could be charged then I'd say there's an argument to be made. Also, let's not forget why the government put in those rules on setting the rates in the first place - consumer protection. Cabbies were routinely ripping people off.
Furthermore, it's not just one thing. It's a set of criteria/tests that for certain states like CA and NJ are defined in the law. Taken in aggregate and not just on one single characteristic of the employment a determination can be made.
This isn't wholesale true. Some areas are highly regulated (see Tokyo) and some are not regulated at all. Also, local government sets a MAXIMUM rate in some jurisdictions. The taxis then choose to set the rate the driver can get paid.
If Uber drivers are taxi drivers, which Uber claims they aren't (they're limousine drivers legally), then they are running illegal taxi services. It seems mighty convenient to pick and choose from laws only when it suits Uber's bottom line.
> but to me it seems that you can jump in and out of employment with Uber & Lyft quite easily, to the point that it does seem more like contract work
You can't really look at one aspect of it and make a determination, it's based on several factors. The main ones that come up in this scenario are if the contractor/employee can set their own rates, and how closely management monitors how they do their job. Flexibility of employment - either in terms of scheduling or to take periods of time off - is not considered.
What's the difference between setting your own rate and being offered a rate that you can choose to accept or decline? Is it the marketplace function of Uber (determining a price point between riders and drivers) that makes it different? Does being a contractor really require the ability to set a rate that no one is willing to pay?
At least in Australia I think someone is only a contractor if they earn income from multiple different companies. If it's all from one then they are an employee.
I think there are plenty of low level jobs that would allow that like waiters, cleaners, construction workers, warehouse workers or delivery drivers.
All jobs that are desperate for workers. It's constant shortage if you listen to the news, but when you see conditions it's more that people don't want to work there because the conditions and the pay are quite bad.
That's ok. They're welcome to pull out. But they won't. Time and time again we see that business rather just raise their fares and make money than pull out of large markets. They are after all money-driven.
as long as there is a penny to be made, someone will make it. If Uber leaves another will fill the gap. I don't feel that regulation generally stifles business, only margins.
In 2015 Uber made 9 million rides in New Jersey, and the article said they were ordered to pay $50M in employment taxes in that year, so drivers would be forced to give up $6 per ride extra in taxes. I don't think the drivers would want this.
In order to make the taxes not ridiculous Uber would be forced to start declining people who want to start riding, you'd have job interviews with an application process ensuring that the driver is going to be worth the significant employee tax, since a driver only driving a single time will cost them significant amounts. That is how normal businesses do this, and I think it would be a huge loss. The ability for anyone to just start driving for Uber with no questions asked is extremely progressive, not sure why anyone is trying to ruin that. I don't understand why people think that making money needs to be so controlled like it is today.
> so drivers would be forced to give up $6 per ride extra in taxes.
how is this different than anyone else who has to work in the state? You can replace drivers with almost any other job. Why should uber drivers get special treatment when its comes to paying taxes?
Personally I think they should pull out nevertheless and make an example out of NJ. That should give enough signals for other lawmakers not to come between consenting parties.
If Uber left, it would look more like NJ made an example out of Uber. Other states would see NJ's success in beating down Uber, and might be inspired to tighten their own labor law enforcement.
Also, Uber would be leaving behind a very lucrative market in NJ: it's the 11th most populous state, 3rd highest in income,[1] and a large part of its population is in the NYC metro area (high population density, lots of rides to commuter trains, etc.).
I wonder how many people have this opinion just to stick it to "the man" -- seems like most of the anti-Uber HN crowd does not actually drive for Uber, but nonetheless express a passionate hatred for their business model.
Your comment doesn't make sense, are you saying that all independent contractors are tax avoiders and leech from society? Either the taxes independent contractors pay are fine and Uber paid a fair amount, or we need to raise the rates for all independent contractors.
They are not independent contractors they are employees its the employer side that is going missing.
An in the USA (vs the UK) actually self employed workers get screwed over getting 20% over a FTE i seen as good where in the UK I would go out for 3x my FTE sallery.
Don't know how that works in US, but here in Europe the answer is yes, the main reason people become contractors is because taxes for contractors are lower than for employees, which means more take-home pay for the same cost for the employer.
In the US, contractors have a higher effective tax rate than employees, and are responsible for FICA withholdings that are usually part of an employer's payroll tax.
Consenting parties? The asymmetry is such that you can't really speak of consent any more. It's about as consensual as a 15 hour workday was in the 1920's.
I don’t know why this is downvoted so much. If the state wins, Uber will absolutely have to either pull out or raise fares. And I would think pulling out might make more sense because the difficulty of accounting for some drivers as employees and some as contractors would be extremely punishing.
Even though Uber will eventually be ruined by the bad press, we should all appreciate what they did. The taxi industry was an overregulated high-rent business dominated by insiders, delivering shitty service at high prices, and nobody was able to break into it.
Uber broke that and introduced people to what is possible with the free market. Now the government can't just go back to its corrupt ways. People will notice if service degrades.
I hope Lyft, Uber, and others are driven out of some markets just so we can see if there's a backlash against the unholy union of government, left-wing unions, and taxi cab companies.
I feel like people should be reminded about what the government and taxi cab union dominated market was like with their hedgefund insider deals (to purchase medallions) and other corrupt dealings.
People always assume decapitating Uber will bring an utopia ... they should be reminded about how corrupt government is when nobody is watching (and people usually aren't watching).
Please don't quote with code blocks. It breaks formatting by forcing horizontal scrolling, and is especially bad on mobile.
Requoted:
> Employee and employer state Unemployment Insurance tax rates will apply to the first $34,400 of an employee’s earnings in 2019 (up from $33,700 in 2018). For 2019, employees are subject to a 0.0425% (.000425) Workforce Development Partnership Fund tax rate. The employee Unemployment Insurance tax rate remains at 0.3825% (.003825) of taxable payroll.
It doesn’t actually break code, it just wraps it on mobile devices differently. Make your window bigger (80 chars) if you want to see full lines. For mobile it’s still more readable than horizontal scrolling code.
> It doesn’t actually break code, it just wraps it on mobile devices differently.
I meant it breaks the flow of the code by inserting line breaks.
> Make your window bigger (80 chars) if you want to see full lines. For mobile it’s still more readable than horizontal scrolling code.
Not all code uses 80 as the standard, many use 100 instead. Regardless, it is not at all true that wrapping is more readable than horizontal scrolling. Wrapping doesn't obey the indentation of the surrounding context.
Taxation is, broadly, spent on citizens and citizens benefit from that. I pay taxes that cover the police as well as the schooling that lowers the chance of people around me having to resort to crime.
In the context of Uber vs NJ, the drivers are already remitting taxes as contractors. The $650M demand from the state isn't a driver initiative with them demanding "Uber needs to pay more taxes.." it's the state saying "What we've collected from drivers isn't enough and we want more from Uber.."
>"What we've collected from drivers isn't enough and we want more from Uber.."
Or its fundamentally correct under the law and Uber has misclassified its drivers as independent contracts whereas they should properly be classified as employees.
After all Uber did disclose this was significant risk in their S-1, and further that such a reclassification could be an existential threat to the business.
It sounds conspiratorial, but now that they have gone public (and investors have cashed out and dumped the bag) the money that was roadblocking these moves by government (note the article makes it clear NJ has been pursuing these taxes for 4 years) has dried up and governments will begin to act. Its no surprise to anyone in the know, just follow the money (in this case the shorts)
You are assuming that the Uber drivers are actually paying their unemployment insurance and disability insurance taxes. Chances are they are not doing so, because independent contractors typically don’t pay into those system and are not eligible to receive benefits.
There are a lot of externalities to Uber operations that are currently being paid by the society, the state is simply collecting some compensation from Uber.
Tariffs cause the price of imported goods to rise, which is bad for everyone, except this tiny minority of employees of the respective industry that get to keep their jobs and salaries.
So I get it. The comment is being sarcastic. But the value is pretty low, right? It's just "I agree with you and here's a poor rendition of arguments opposing so that we can make fun of them". I get it's useful because stuff like that is great in-group signaling and builds bonds but perhaps it's not really that useful when discussing?
What a pointless comment. It's just a bunch of sarcasm with no information. I was doing part time delivery while freelancing a couple years ago. Please post something substantive not this junk.
Another great example of the government mafia stifling innovation and trying to extort and rob everyone at every opportunity. Government is the big iron ball attached to our foot holding us all back.
I mean, I used to get tech support gigs on Craigslist all the time. Should Craigslist have been responsible for paying me minimum wage during that time?
i cant even make the logic jump to compare these too. Uber isn't just a place people post about needing rides and then pick from one of the respondents.
Über was just much more lucky / smart on its IPO than WeWork, as VCs could get rid of their overvalued assets before the company was started to be regulated like a normal company.
In guessing they will just get another round of investment when running an illegal taxi business at scale...I mean disrupting. Oh well I don't mind the subsided rides. The drivers have been very pleasant and I'll hate going back to cabs when this came party ends
This is not Uber's real problem. The much bigger problem is that Uber's business model by definition cannot be profitable, and here is why:
Let's start with the costs of the business model.
What are the two costs involved in transporting a customer from point A to point B? They are:
- The car’s time
- The (human) driver’s time
Operating or leasing a car for a certain amount of time (maintenance/insurance/gasoline) has not become significantly cheaper since Uber was created, so there is no cost reduction here.
Hiring a human's dedicated time (at least minimum wage) has also not become significantly cheaper since Uber, so here too there is no cost reduction.
Therefore the cost to transport something from point A to B has stayed exactly the same, before Uber and after Uber.
To transport something from point A to point B, someone must still carry this unavoidable cost. If the customer is not carrying this cost, then Uber must be carrying it. Uber can do so for now because investor money has subsidized the cost. But Uber can’t do this forever because investors will lose patience and stop the subsidy.
Uber can only be profitable once the unavoidable cost transport is passed on entirely to the customer. At that point, Uber will have to charge the same price as any taxi. Stated differently, Uber can never be more profitable than a taxi company on a per-ride basis.
Given that customers have no loyalty to a ride-share service, because every ride is virtually identical, any taxi company can build a similar service, removing any "walled garden" or "network effect" Uber may have hoped for. In fact, Uber clones are doing well in other countries and are creating significant headwinds for Uber.
Uber therefore has no hope of ever delivering its promises unless it can deliver driverless cars. Even if it can do that, the technology will quickly become commoditized and ubiquitous, meaning that any other ride-share service could offer it as well, once again removing any advantage, and driving margins for all ride-share services to near zero.
> The money that they’re not paying into the unemployment and disability systems is being picked up by the states and the taxpayers.
Isn't it true that independent contractors are not eligible for unemployment or disability claims?
Yes that's true.
Given that, it is false that the "cost" is being picked up by others, because there is no cost here.
And given that the state is seeking retroactive reimbursement for past years, all independent contractors in the state who worked at this during this time period should be retroactively reimbursed for times of unemployment and for disability issues. Odd the state's not offering that.
The state would beg to differ: "..the department also has determined that 65 drivers who listed Uber, Rasier or Lyft as their employer in unemployment-insurance-benefits claim forms are employees of those companies and therefore eligible to seek jobless benefits."
> It’s not clear whether the company ever paid any of that bill.
What's the point of these fines if NJ and other governments have no real power to enforce them? This seems to be all for show. Sure, we throw poor people in jail over a $20 fine. But Uber doesn't pay tens of millions and nothing at all happens to them. It's impossible to see this as anything other than separate justice systems for the rich and poor. If Uber was a real person, they'd probably be in jail for life. If they weren't white, they'd be sitting on death row. Instead, we talk of them as if they are some sort of success: a company breaking laws and hemorrhaging money with no chance in fucking hell of ever being profitable.
this isn't about protecting the drivers, this is about protecting the taxi industry and metropolitan mass transit unions both of which were under threat of better service being offered at lower costs both to tax payers as a whole as well as customers. you don't have to like Uber to understand what this is really about. It is protecting the current gravy train the politicians rely on to stay in office.
edit:
https://www.njbia.org/get-njbias-tax-changes-for-2019/
Unemployment Insurance, New Jersey Workforce Development and Health Care Subsidy Fund Taxes
> Employee and employer state Unemployment Insurance tax rates will apply to the first $34,400 of an employee’s earnings in 2019 (up from $33,700 in 2018).
> For 2019, employees are subject to a 0.0425% (.000425) Workforce Development Partnership Fund tax rate. The employee Unemployment Insurance tax rate remains at 0.3825% (.003825) of taxable payroll.