[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.

[AnthonyMouse]

> Almost every business has a pyramid structure

So do Egyptian Pyramids but that isn't the relevant structure.

Do you really not understand how a multi-level marketing scam works? You pay to sign up, then you get paid for signing people up. The obvious problem is that this is recursive and exponential, which quickly exhausts the available supply of suckers so that the people at the bottom lose money because there is no one for them to sign up.

That dynamic is not at play here. There is no recursion. You don't pay to sign up and then get paid for signing people up, you pay to sign up and then get paid for driving people around. The people who get driven around don't have to sign people up.

There are lots of professions where you have to pay to work. Many trades require the tradesman to buy their own tools. A proprietor who wants to work in a booth at a fair has to pay for the booth. That doesn't make them Ponzi schemes.

[lightedman]

"Do you really not understand how a multi-level marketing scam works? You pay to sign up, then you get paid for signing people up."

There are dozens more MLM scams than the one you describe, and in fact they're more prolific.

"That dynamic is not at play here. There is no recursion."

'Give us money and we'll give you a chance at making more money.' That's quite recursive, and in some states, it's in fact a form of illegal gambling.

"There are lots of professions where you have to pay to work"

No, you don't. If you want to use ANOTHER BUSINESS and their facilities to do your work, then yes. Cosmetologists can work right out of their own home as long as they have the relevant license. They don't have to rent a spot at a barber shop. Strippers don't have to work at a strip club - they can advertise on Craigslist and do private parties instead.

"Many trades require the tradesman to buy their own tools."

Some states require that if you require a specific tool or item for an employee or user of your services for the purposes of conducting business, you the employer or service provider are required to provide it. Here in CA, where Uber is HQ'd, we have that codified in law.

[AnthonyMouse]

> There are dozens more MLM scams than the one you describe, and in fact they're more prolific.

"You pay to sign up, then you get paid for signing people up" is basically the definition of a multi-level marketing scam.

> 'Give us money and we'll give you a chance at making more money.'

You have just described investing, lending at a variable interest rate, all forms of commodity and currency speculation, universities, craft fairs, conference booths, commercial real estate, manufacturers paying retailers for shelf space, salesmen buying leads, the entire marketing industry, etc. etc.

> That's quite recursive, and in some states, it's in fact a form of illegal gambling.

The fact that you can do something more than once in a row doesn't make it recursive. The problem with multi-level marketing is that A has to sign up B in order to make money, but that requires B to sign up C and so on recursively, which necessarily means there is someone at the end who pays but doesn't get paid.

> If you want to use ANOTHER BUSINESS and their facilities to do your work, then yes.

A landlord who hires a plumber to fix a burst pipe will claim they're a contractor. So will Uber. So will the perpetrators of the MLM scam. You can't use something to distinguish cases when it's the same in all of them.

> Cosmetologists can work right out of their own home as long as they have the relevant license. They don't have to rent a spot at a barber shop.

Their house doesn't come from the house fairy. The fact that they also live in it doesn't mean they didn't pay for it. Moreover, finding one person who got a house from the house fairy wouldn't get rid of all the other people paying money for space.

> Strippers don't have to work at a strip club - they can advertise on Craigslist and do private parties instead.

Drivers don't have to pay to get extra money, they can just take the normal rate.

> Some states require that if you require a specific tool or item for an employee or user of your services for the purposes of conducting business, you the employer or service provider are required to provide it. Here in CA, where Uber is HQ'd, we have that codified in law.

Even in that case, you will still have people working on commission who buy items themselves which aren't "required" but increase their effectiveness and therefore their commissions.

Also, my employer requires me to wear pants at work, but they have never provided any. Are they in violation of California law?