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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
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.
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.
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.