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Uber Drivers Are Employees, Not Contractors, Says California Labor Commission
siddesu writes: The California Labor Commission has ruled Uber drivers are employees and not independent contractors. The ruling has serious implications for Uber's business model, since it will now be required to offer its drivers benefits that meet the requirements of the Californian labor laws. "Uber had argued that its drivers are independent contractors, not employees, and that it is "nothing more than a neutral technology platform." But the commission said Uber controls the tools driver use, monitors their approval ratings and terminates their access to the system if their ratings fall below 4.6 stars." Uber has previously suspended drivers for registering their cars as commercial vehicles.
Here is an update to this ruling found in another article:
Update: Uber pointed out that the ruling only applies to one driver. “Reuters’ original headline was not accurate. The California Labor Commission’s ruling is non-binding and applies to a single driver,” a spokesperson said. “Indeed it is contrary to a previous ruling by the same commission, which concluded in 2012 that the driver ‘performed services as an independent contractor, and not as a bona fide employee.’ Five other states have also come to the same conclusion. It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.”
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
It's not really that crazy when you consider their gross revenue of 10 billion, absurd profit margin (all they do I run an app, right?) and massive potential to expand into new markets.
Uber doesn't make $10 billion in revenue. You must have read a story from last year where it was projected that they may have $10 billion in revenue in 2015. No one actually knows what their revenue is but an investor stated just a few months ago that they were briefed it would be in the $2 billion range:
Part of that confidence stems from Uber’s impressive sales growth, which the company sees accelerating this year. Uber recently told some investors that it forecasts net revenue, or the amount it keeps after paying out drivers, of more than $2 billion this year, according to a person who was briefed on the matter
http://blogs.wsj.com/digits/20...
Am I missing something here?
Yes, you are missing the part where both construction contractors and eBay sellers set the prices for their respective offerings, while Uber drivers do not.
Whoosh!
There was a reason why the part about referencing how it was before the medallion system was included in the post you replied to.
The medallion system was EXPLICITLY DESIGNED to reduce the number of taxis in New York City. That was the MAIN FEATURE of it. Licenses were introduced to regulate the drivers, but that was separate from the medallion effort.
Go back and do your homework.
Learning HOW to think is more important than learning WHAT to think.
Yup.
You;re confusing yourself with details.
The difference between a contractor and an employee is that more of an employee's decisions are made by his boss. Uber controls the vehicles it's drivers use, including specific banning specific makes, insisting of specific models, not allowing older model years, and colors. They have to use a smartphone with a supported app.
OTOH, a contractor could show up at your house with hand tools he'd borrowed from his Amish buddy, a brand-new consumer-grade drill, or a 25-year-old commercial grade Dewalt. Since he's a contractor, and you're smart enough to have put time limits in the written contract, you don't give a shit which of the three options he chose, you just give a shit whether he can finish the damn job. n many cases you're out of the house, so he could work a 24-hour shift and then take two days off if he wanted. He controls how he works, therefore he's a contractor and an independent businessman.
Same with eBay or Amazon. All they require is internet access with a newish web browser. Other then that you can do whatever the fuck you want. Their sellers could work at 3 AM naked. They could work 9-5 in business suits. They could work 4 AM to 5:30 AM in the uniform of the Royal Hussars. They have 100% control of their actual work conditions, thus they are also independent businessmen and contractors.
OTOH, driving at any level for Uber requires a relatively recent (post-2000) car, bans a specific model (the Crown Victoria), and higher levels specify shit like the color of the car and what the seats are made of. Uber will yell at you if you get the more expensive commercial vehicle registration.
So Uber drivers have some pretty significant control over their jobs (for example: there's dress code), but a lot less control then actual contractors or the folks who sell on eBay.
The main differences are as follows;
1. Uber sells a service and Amazon sell items.
2. Uber takes a request and directs that request to a driver chosen by Uber. Amazon connects a specific purchaser to the seller they chose.
3. Uber sets the price for the trip. The price is set by the seller on Amazon.
In many cases a subcontractor designation is just a way to avoid paying benefits, half of social security tax, and workmens' comp. The role of "consultant" is often in that category. It's a high-status name for a lackey with no benefits.
As a renovation contractor my subs are very clearly defined in Federal tax law: They must have their own business, with their own tools and vehicle. I'm not allowed to hire someone as a contractor simply because they agree to work without benefits. Uber drivers have their own vehicle, but not their own business. Nor are they in a position to negotiate a contract with Uber, which is what a sub would do.
This dispute is happening in the context of a bunch of shenanigans happening in California, Uber's only on facet of it.
A few months ago there was a big strike between truckers and the trucking companies at the port in Long Beach. the companies insist that the truck drivers are independent contractors because they are paid by the load, not by the hour, and the truckers are "independent operators" because they own the trucks on paper. The problem is the truckers are only allowed to use trucks they lease from the trucking companies, the trucking companies add on various "fees" from the lease bill, they have to make deliveries when they're told (while still not having official hours or a schedule). Critically, the drivers cannot avail themselves of workers comp, overtime or any of the other things an employee would be entitled to. They're employees but the employers have used paper technicalities to reclassify the relationship, strictly for the purposes of evading labor law.
The kinds of disputes are inevitable in a piecework economy, and they were the norm prior to the progressive era in the US. 80 hour weeks with no overtime, paid by the unit, no workplace safety regulations, random fees and wage dockings, and if you complain, maybe we don't need your services anymore.
Don't blame me, I voted for Baltar.
Not sure why this is marked as troll. Each almond nut requires one gallon of water, which is a substantial amount of the water assigned to agricultural use. Unlike the produce fields that can lie fallow during a drought, an almond grove must be watered all the time. Even as almond groves are dying, new almond groves are being planted. Almonds should be grown somewhere else where water is available.
what evidence do you have that the politicians have been bought off?
I'm glad you asked, as that gives me a great reason to post a link to Simon Garber. As Wikipedia says, "While in Russia in 2001, Garber became friends with Patrick Daley, the son of long-time Chicago mayor Richard M. Daley. City officials tightly regulate all aspects of medallions ownership, granting permission to purchase medallions on an individual basis. Within a year of meeting Patrick, Garber quickly acquired over 300 Chicago taxi medallions. Garber also hired Mayor Daley's former chief of staff Gery Chico as a City Hall lobbyist. In 2003, Garber used this political capital to start the Chicago Carriage Cab Company and was granted permission to operate the taxi business in Chicago. Within six years, the Chicago Carriage Cab Company had amassed over 800 medallions, making it the largest taxi company in the city."
This is but one example, from one city. A little Googling will easily reveal many more examples.
If you give people something for free they'll strip it to the bone. In a market for something like taxi fares there are also weird paradoxical effects: when there are fewer fares taxi drivers actually work longer because they have to spend to looking for street hails.
Historically NY in the 1930s had three times the number of taxis on the road as they do now, I can't even imagine. Price competition drove rates below the cost of the ride, the drivers were a public hazard and in the late depression, even after the medallion ordinance, a lot of cabbies just let their hack licenses expire due to lack of fares. The NY pre-medallion taxi business was a classic market failure. The medallion system was actually a significant mitigation from the original plan of just monopolizing the taxi system in NY as had been done, with a great deal of success, to the subway system. Fewer fares can actually increase the number of cabs on the street and their overall threat to traffic and public order.
I personally think, on a strictly laissez-faire basis, taxis probably aren't economically sustainable (nor are Ubers), but the city keeps them alive because New Yorkers place cultural value in not owning a car and living on Manhattan island, so as long as the citizens of that city value these things, the rules will persist, and they'll gladly live with the persisting levels of inefficiency, the costs and the corruption.
A somewhat deeper problem is regarding something like the market for taxis as a "natural" phenomenon when in fact it's completely man-made, technological, and determined by various fiats and cultural constructs. And even then we're left with the problem that just because something is natural this does not mean that it is good or desirable...
Don't blame me, I voted for Baltar.
You're really confused here. That';s not surprising. This is a confusing area of law, and unlike every other area of law I have ever studied there are literally no hard and fast rules. There are no tests. there are testish principles, which re frequently combined with common sense, but if you think that there's actually some way to prove 100% beyond a doubt whether anyone anywhere in this country is definitively a contractor or an employee you're wrong.
I strongly suspect, for example, that if you hired a contractor to put in a roof and you specified not only the kind of roof you wanted him to build, but the methods used to build it, he'd be able to sue you and get employee status. He'd certainly have a better shot at winning then a lot of people who everyone thinks "of course they're not contractors," like say a star Doctor on a medical team who gets to write his own schedule and break all the damn rules because he's the only heart specialist willing to work in Akron.
To quote the IRS:
In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.
Common Law Rules
Facts that provide evidence of the degree of control and independence fall into three categories:
1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
Note that eBay sellers are not controlled in HOW they do their jobs. eBay has no control over their financial lives -- they probably use Paypal, but they could easily set up their own credit card contract, so eBay doesn't actually force them to use it's system. And there are no written provisions involving benefits or future work. It does force them to use a computer with somewhat modern software*, so it does somewhat fulfill the first testish thingamabob.
Also note that WHAT is done in the job is totally irrelevant. If you tell your contractor to fix your roof in a way that can only be done by one method; you have not actually told him to use that method. You did not order him to use a torch down, physics did. In theory he could create a new method to do the same thing and get paid for fulfilling the contract. Since he probably provides his own tools, has his own bank account, etc. then you also do not control his finances, so the second testish thing is also not filled. Since he only works for the duration of the contract the third is also not filled.
OTOH an Uber driver is penalized if he doesn't take a certain number of rides, and he has to accept most of the ones that come on his screen or his future work is jeopardized. This means he fulfills testish thing-a-thing more then either the contractor or the eBay seller, but not as much as most employees. Since Uber handles all the business stuff, Including leasing lots of them their cars, and insisting that they register the cars as personal vehicles (rather then commercial as the law seems to require), Uber is gonna get it's ass kicked on testish thingamabob 2 for a lot of these guys, but not others (ie: the guy who bought his car with a business loan, works for three companies, is using a registered corporation for all his Uber dealings, etc.).
The third test gets interesting. Since further work for Uber is expected there's a continuing relationship. But there's no pension or health benefits.
*I suspect XP, or a LINUX distro, with the most recent possible browser on a high-end Pentium would actually work, but it would probably suck ass, and I don't have such a machine to test with.
My lawn is turning brown. A lot of grass is grown for the beef industry which is one of the biggest wastes of water in the state. It takes something like 6,000 gallons of water for each pound of beef. Almonds don't really grow anywhere else in the country and California produces a majority of the world's supply and 99% of the almonds grown in the US. Almonds are native to the Mediterranean climate of the Middle East. The funny thing is that wild almonds are highly toxic and contain an enzyme which creates cyanide. Each wild almond can contain 4-9mg of cyanide. Sweet almonds contain a small fraction of that since they lack the enzyme. Almonds are considered a cash crop due to the high prices they demand. With the drought, though, a lot of farmers are cutting back on their water usage, though last weekend when I drove along highway 120 I saw at least one orchard running their sprinklers in the middle of the day with pools of water around the trees.
99% of the walnuts grown in the US are grown in California. The Persian and English walnuts are the most common for eating and like almonds like a Mediterranean climate. The black walnut is much less popular and there are varieties native to both the eastern North America and California and some other places.
Before the major drought, growing these was not a major issue in California. Unlike other crops, though, it takes years until a tree can produce and they don't do well in other areas of the country.
Hops, barley, wheat, etc. needed for beer can be grown just about anywhere and don't necessarily have to be grown in the state for the brewers.
Wikipedia.
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