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The Uber Economy Needs a New Category of Worker
An anonymous reader writes: Uber headlines a new group of companies building out the so-called "sharing economy," in which people can easily hop in and out of employment modes. Somebody can suddenly start hiring out his driving services to others, taking breaks and setting hours as he prefers, and then just as quickly stop participating forever. An article at NY Magazine says we need to define a new class of worker to fit Uber drivers and similar at-will employees. "According to American employment law, though, our driver must be one or the other, a 1099 contractor or a W2 employee. And the gulf between the two in terms of mandated government protections and benefits is as wide as the line between them is blurry. As such, thousands of on-demand-economy employees and scads of lawyers are at war in court to determine what camp our average driver should fall into. ... It might be time for a new standard that splits the difference between the two — a 'dependent contractor,' as some labor experts call it — that would be better for businesses, consumers, and all those workers themselves."
We don't need categories. All these situations are voluntary and should be handled by contract. Stop creating regulations that make it harder for people to get a little income.
I agree...why a 3rd category??
They are clearly doing contracting work, plain and simple...and a model of work I prefer!!!
I would, however, encourage them to incorporate themselves, which has a number of benefits.
If incorporated the relationship is clearly corp-to-corp which keeps the govt from fscking up the relationship trying to insist you should be a W2 employee.
Also, if you don't mind a little extra paperwork, make yourself a S-corp. This way, you only have to pay SS and medicare (the employment taxes) on a portion of your billing. For example, if you bill $100K. You pay yourself a W2 salary from your company that is reasonable, say maybe $30K. Now, you only have to pay SS/Medicare (employee and employer parts) on that $30K. the remaining $70K you only have to pay normal federal (and state if you live in a state tax state) after you write off all your expenses.
This savings can really add up.
Also, most of the insurance policies out today after obamacare came out, will qualify for high deductible policies, which will allow you to open a HSA (Health Savings Account) into which you can sock up to about $3K pre-tax for your normal routine medical expenses (co-pays, meds, etc). And, you get to write off a LOT of expenses.
Sure it is a bit more paperwork, and you have to be an adult and learn how to manage money, save for tax payments, etc. But I find it is a MUCH better way to do things than the usual W2 set up...where you have to "earn vacation hours" (God I hated this), you work when you want to and are off when you want to....and if you do things right, you can not only have this independence, but you can also save a bit more of your hard earned money from Uncle Sam.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
And a lawyer and an accountant and an accounts manager and a salesperson and a...
The reason I'm an employee is so that I can do what I enjoy doing and let some other suit deal with giving people handjobs under the table or swing at each other's balls. Yeah, I know I'm not "in charge of my destiny" or whatever, but I can focus on developing the abilities that actually make me useful for something other than brown-nosing.
And before anyone disagrees with this, I should note in duckintheface's favor that Uber penalizes drivers who decline too many fares, especially drivers of upscale services such as UberBlack who turn down too many UberX fares. Ergo, drivers cannot reasonably decide which work to take, reinforcing duckintheface's point.
A cab doesn't have this problem.
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