[lightedman]

"I think the author is painting this in the worst possible light."

You should work for any sort of delivery or courier service. This 'worst possible light' is daily business for companies like Papa Johns and others that claim their drivers are merely 'contractors.'

This is also quite illegal - you can not pay to work. It's literal extortion - you have to pay us in order to receive this amount of wage. No, the courts frown upon this.

[kingnothing]

IANAL, but it's similar to how cabs, barbers, strippers, and other contractors operate.

[dawnerd]

They're renting space though. An uber/lyft driver isn't renting a medallion or a barber seat.

[sokoloff]

Salespeople pay for leads. Businesses pay for online clicks. Advertisers pay for eyeballs.

I don't see this as a bright-line case.

[hydrogen18]

Would you agree that none of those people pay their employer in that case? I certainly agree salespeople pay for leads, but it is usually an outside party supplying them.

[sokoloff]

To keep it close to Uber, many cab drivers rent their cabs/medallions from the cab company.

In the taxi (and Uber) case, I believe most of those are contractor relationships, not employee relationships.

[hydrogen18]

Correct, but I could go rent the cab for a flat fee and just drive it around for my own personal wishes if I wanted to. They might put some restrictions on it (don't drive outside the city, no interstate) but otherwise I'd be fine.

As far as medallions go, that is just the result of government regulation. Plenty of industries wind up being populated with nothing more than a bunch of rent seekers. The government sets up an artificial scarcity where there is none to control negative externalities. The fix is easy: require the license holder to be the one that actually uses it. No leasing to others. As far as I know, no one has done that for commercial licensing. Ironically for private licenses (fishing license, etc.) this is already the case.

[PatientTrades]

> This is also quite illegal - you can not pay to work

You do know the offer is optional right? If a driver doesn't want to pay $115 for the 33% rate increase then they don't have to. Did you read that part? Also, many drivers could benefit from this especially if they drive full time in popular areas.

[drewrv]

There are all sorts of optional deals that are illegal.

[lightedman]

"You do know the offer is optional right?"

You do know that such an offer is illegal, right? It is literally "If you pay us, we'll pay you more later on." It's the actual beginning of a Ponzi Scheme.

[AnthonyMouse]

> You do know that such an offer is illegal, right?

Which law does it violate?

> It's the actual beginning of a Ponzi Scheme.

Your argument is of the form "Romans build roads, therefore people who build roads are Romans."

Ponzi schemes don't have actual customers, which inherently leaves the people at the bottom of the pyramid holding the bag.

Uber pays drivers from fares. There is no pyramid.

[michaelmrose]

Ponzi schemes are defined by the fact that you can earn some revenue but not enough to sustain the employees at the base of the pyramid while having some means to bring in new players who will help you earn enough to keep going usually by contributing some part of their income to you.

Its a scam because their is a finite pool of potential idiots and when you run out the bottom of your pyramid collapses taking subsequent layers with it eventually.

If a multi level marketing company actually provides enough wealth for the bottom level to function then it isn't a ponzi scheme.

[lightedman]

Uber's been running at a consistent loss.

Ponzi Schemes don't have customers? There have been plenty of "multi-level marketing' businesses selling things like perfumes, knives, even candle wax, and have been ruled as Ponzi/Pyramid Schemes. It's the exact same behavior - pay us to make money.

[AnthonyMouse]

> Uber's been running at a consistent loss.

So do a million other startups. That doesn't mean the drivers don't get their money.

> Ponzi Schemes don't have customers?

The majority of the scam's revenue comes from payments from workers rather than sales to customers.

> It's the exact same behavior - pay us to make money.

Pyramid schemes have pyramids.

[lightedman]

"Pyramid schemes have pyramids."

Almost every business has a pyramid structure - that's literally basic business management for all but the most n00b of startups. It's the behavior that defines a Pyramid Scheme and this behavior matches it almost 100% to the definition.

In fact there's a nice database of plenty of other companies acting EXACTLY like this and subsequently getting their butts handed to them in court - http://www.mlmlegal.com/legal-cases/Illinois_v_Unimax.php is one of my favorite cases to read because it very clearly demonstrates what Uber is doing here is illegal - just because you aren't required to do it or buy into it doesn't mean it isn't illegal in the first place.

[viraptor]

The higher rate is there to incentivise more people. The stable state is at the point where enough drivers opt-in that they all get to just the break-even point.