California Labor Commission: Uber Drivers Are Employees

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(Adam Fagen)

When app-based ride-hailing services make the barrier of entry to the taxi business as low as “yep, I own a car, I try not to hit things with it, and I am not a criminal,” traditional ideas about who is an “employee” have to change. Recent legal decisions in Florida and California have declared drivers for Uber and similar services to be employees, which could be very expensive for these companies if the decision holds up on appeal.

Disputes over whether a worker is an independent contractor or an employee are a long-running issue in labor law in general. Companies that habitually do this and are sued by employees (or, as the companies would insist, freelancers) are well-known brands like FedEx and Google.

For drivers for Uber, Lyft, and other similar services, the difference is a significant one. Being an independent contractor, as drivers are defined now, means that drivers are responsible for supplying their cars, maintaining the vehicles, and paying for gasoline.

If drivers are found to be employees, as the driver in this case was, they would be entitled to have Uber pay their car expenses, as well as other costs that employers are supposed to cover. For all workers, that would include the employer’s portion of Social Security, unemployment insurance, and benefits like health insurance if the employee works enough hours.

For ride-hailing app drivers, the stakes for Uber are even higher: the driver in the California Labor Commission case only worked for the service for two months, and the company was ordered to pay her $4,000 in expenses.

Uber drivers are employees, not contractors: California Labor Commission [Reuters]

by Laura Northrup via Consumerist