California has been hemorrhaging businesses the last few years due to overbearing regulations and taxes, many of those companies finding greener pastures in places like Texas.

Few months back Elon Musk, Tesla CEO, threatened to move it's ops to Texas after California didn't want to play ball with the company with allowing them to reopen.

More details here:

https://www.wsj.com/articles/elon-musk-pushes-to-reopen-tesla-in-california-and-keep-up-with-detroit-11589393592
https://www.dallasnews.com/business/autos/2020/07/22/teslas-big-tease-its-picked-a-site-for-new-us-assembly-plant-but-isnt-saying-where-yet/

As of today Lyft has suspended it operations in California to comply with the below law suit. Apparently it's not economical for Lyft so instead of complying, they're just shutting down services with thousands of jobs lost. Uber has also threatened same action.



https://www.wsj.com/articles/lyft-to-suspend-service-in-california-11597942614?mod=hp_lead_pos2

I'm just sitting here wondering at what point do California state legislators realize they're going full retard and are driving massive job providers out of the state? I rather have the ability to work as a contractor instead that opportunity completely disappears because government is forcing a company to operate in uneconomical conditions. Not sure the economic model California is using in which higher taxes higher regulations and less jobs is going to result in a positive outcome.

This post was edited by ofthevoid on Aug 20 2020 11:17am

This is just Uber/Lyft playing hardball so that people vote for prop 22. I say, call their bluff

AB 5: https://ballotpedia.org/California_Assembly_Bill_5_(2019)
Prop 22: https://ballotpedia.org/California_Proposition_22,_App-Based_Drivers_as_Contractors_and_Labor_Policies_Initiative_(2020)

Edit: Also, I checked my Lyft app and I can still get a ride in CA. Lyft isn't going to walk away from Los Angeles, San Diego, Bay Area, etc. because it's too profitable for them. They will just harm rural people instead.

This post was edited by thundercock on Aug 20 2020 11:31am

Uber lost 8.5 billion in 2019. Like i understand why the State and workers want more benefits but at some point the math has to make sense.

If Uber, Lyft, etc are operating at a loss with their current model, increasing their labor costs is going to make that issue even worse not better.

If they're still operating at a loss maybe they need to go under. You can't rely on venture capital forever

Don't tell that to Snap and Zillow.

Most businesses take time to become profitable. Fuck-ton of businesses took years to become profitable, Tesla, Amazon, Square, etc. Uber/Lyft are massive job providers, smacking them over the head on that journey is not the right thing to do when labor force participation rate is at decades low and unemployment is in the double digits in the US.

What part of AB 5 do you disagree with? This affects only a small percentage of people who work for Uber/Lyft so THIS isn't why Uber isn't profitable. Uber simply needs to change its business model and if that means raising prices on consumers, then so be it. Consumers will pay almost anything for these services.

You mean tax writeoffs.


Also, I am generally in favor of people being independent contractors. We need Medicare for All and UBI, not employer-tied benefits. Freedom to work when you can instead of being attached to a work schedule is of major importance to so many, including me. I haven't been an employee of anyone in 12 years, and I would have suffered if I'd have been classified as such. Again, we need to strengthen our social saftey net because it increases liberty for everyone, labor and employers both.

This post was edited by inkanddagger on Aug 20 2020 11:49am

No it's not 'the' reason but it doesn't help. I disagree that Uber/Lyft drivers can't be 1099 employees. This business model has slowly been working itself to becoming profitable so why smack these businesses over the head? Wouldn't it be more logical to wait 5-10 years when they're raking in net profits for such a push?

Fundamentally this is a question of whether it's better to have contractor-type jobs which don't have all of the benefits, i.e. sick time or not to have them. I'm choosing the former 10/10 times because i rather give people the choice if they want to drive Uber for an extra few bucks here and there instead of killing all of those jobs.

This post was edited by ofthevoid on Aug 20 2020 11:51am

agreed