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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.
Be a cab company and claim not to be.
Violate the law about cabs and pretend they don't apply to you.
Generally be a bunch of self-entitled assholes who think they magically get to decide what laws apply to them.
Act like whiny fucking spoiled children when the world doesn't see it your way.
Fuck Uber. The assholes who own it are just delusional dicks.
Maybe if they were not exclusive to Uber, they might be considered non-employees. Otherwise, they are just like a pizza delivery guy, working for a pizza shop.
What delusional, drunken moneys could possibly claim Uber is worth $40 freaking billion dollars? What's that, like 4 centuries worth of projected income?
Who the hell makes up these stupid valuations?
They have an app, and a staunch belief they're exempt form laws.
But $40 billions dollars? That's complete fantasy that is. Real corporations with real assets and real income might be worth that.
Holy .com level of overvalued companies.
Lost at C:>. Found at C.
Whether or not an employee owns the vehicle has no bearing on being a contractor or not. That's as silly as saying "Sales people for [company x] own their own vehicles so they should be contractors".
What determines the difference between an employee and contractor is how much control the company asserts over the person.
That's the place where they use water on almonds instead of people, right?
No, they use the water on smelt instead of Almonds and people.
Jesus was a compassionate social conservative who called individuals to sin no more.
How are they wrong exactly? You disliking their decision does not make it wrong.
If each employee owns their own vehicle then they should be contractors.
Owning your own equipment is just one of many criteria, and is not enough by itself to make you a contractor. Other considerations:
- Is there a written contract?
- Do you set your own hours?
- Do you also work for other contractees?
- Do you set your own prices?
- Do you have leeway to decide how and in what order you complete tasks?
- Are expenses reimbursed?
- Does the contractee/employer provide training?
- Can you quit at any time without liability? Contractors ususally have a legal obligation to complete their contract.
There are just some of the criteria, and there is no magic number that have to be met. It is subjective. But the more the better. The bottom line is if you want to treat someone as a contractor for tax purposes, you also have to treat them as a contractor for work purposes as well.
When you do a construction project, you contract several roles out usually.
When you do you often:
1) Dictate the materials they must use
2) In some way the tools they must use
3) You can get rid of them if they fail to meet your quality standard
How does construction work in California?
Also under the definition that they appear to have given, people who sell on Amazon and Ebay are employees.
1) You have to use their tool (ebay or amazon)
2) Payment goes to amazon and they pass on their cut
3) You have to follow their terms and rules
4) They monitor their approval rating
This appears to be exactly the way Uber operates.
Uber and Amazon both control the platform.
The drivers or sellers must follow their terms and rules.
They both monitor feedback and can in some ways offer economic punishment (suspension of service, etc)
Am I missing something here?
I've seen plenty of drivers who subscribed to Uber, Lyft and Sidecar. The labor commission is simply wrong, and I hope Uber litigates this all the way to the supreme court if necessary.
-jcr
Ha ha ha ha ha ha. The labor comission is spot on.
Poor Uber, it's hard to game the system eh ? Employees that are not employees, taxis that are not taxis, commercial drivers that are not commercial drivers. You get the drift. Uber like many other new enterprises wants to privatise the profits and externalize the costs. And the poor drivers are left out in the cold. For once good job California. Hope that other States will follow in smacking down Uber.
Am I missing something here?
Yes, you are.
Am I missing something here?
http://www.dir.ca.gov/dlse/faq_independentcontractor.htm
"There is no set definition of the term "independent contractor" and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor... DLSE starts with the presumption that the worker is an employee."
Basically they are saying that everyone is an employee unless proven otherwise, but there is no standard for proof. Awesome system ya got there.
Yeah, there are labor laws for a reason and if you're using "contractors" you don't have to pay minimum wage for example. There are some Uber drivers that have learned how to game the system and earn OK money, but they work hard and hustle customers.
The average Uber driver probably makes less than minimum wage, - especially once their expenses are factored in. Uber pays a premium for working certain hours, accepting 90% of rides, taking at least one ride per hour in that time frame, etc. It's hard to qualify for the premium all the time.
So really what it amounts to is that Uber is dancing around labor laws so that they can offer a cheaper and more convenient service. There may or may not be evil intentions, but that's the end result.
I guess the question is when does an arrangement for services cross the line into exploitation? It's not always obvious. I may be perfectly happy to do something for a few bucks on the side or even for free just for the experience or the kicks. But what if someone else is trying to earn a living doing the same thing?
For example, let's say you'd think it be great to sail across the Atlantic on a 70 foot keel boat but you lack experience and a boat. You run across someone advertising the need for crew on a two month sailing tour, - no experience necessary. You have to help pay for food and supplies, plus you have to help sail and maintain the boat along the way. But otherwise there's no charge AND no pay. Sounds like quite an adventure right? Well, a week into it you discover that there's a whole lot of work to do and the "captain" isn't doing much of it. In fact, he's got paying guests that aren't doing anything at all. You want off but the best he'll do is drop you at the next island and you've got pay for your own way home.
Well, there are laws that govern this kind of thing because it is very easy to exploit people.
Am I missing something here?
Yes, two things.
The first thing is that you are using your own definitions and not the ones applied by labor law. There are six guidelines by Department of Labor. (Integral to business, permanency of relationship, worker's investment in equipment and facilities, nature and degree of control by principal, worker's opportunity of profit/loss, and skill/training necessary. While your brief lists are interesting, they don't match what the government actually uses.
The second thing you are missing is the definition of contractors. This is about the legally defined "independent contractor" or 1099'er, that are one type of contractor who is effectively a person operating as a business. There are other types of jobs that people refer to as contractors, such as short term employment (w2 with a time limit), or cases where employees of one company are brought in to work with another company's employees. Their decision is only about the 1099 style of contracting, which Uber uses.
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Going through each of the government requirements as they apply to Uber and your Ebay seller example:
Integral test. Uber's core business is connecting people for rides and moving funds between accounts. Drivers provide rides using the service, but they aren't integral to the business of connecting people (although they are necessary to implement the task). Ebay sellers similarly use the service, but aren't integral in providing the service. MOSTLY NEUTRAL, slight bias toward employee.
Permanency test. Some Uber drivers meet this, others don't. Those who infrequently pick up riders, those who are on for an hour or two during the day, they're not really permanent. The ones who have used Uber to replace their income, or drive for many hours each day, they're much more permanent. Most ebay sellers are extremely transitory, having items up for under a week, or using it as a store front for goods that are constantly rotated. WEAK FAIL, some people biased towards employee, others biased toward 1099'er, so maybe some people should be reclassified.
Investment test. Uber has some investment through insurance and their guarantees, but leaves most of the cost to the individual. They've got a weak investment. Ebay has nothing invested in the sellers. WEAK FAIL, the long list of guarantees and insurance they offer to their drivers pushes toward employee.
Nature and degree of control test. Uber has a high amount of control, coordinating all the details of rides,establishing fares, and causing the drivers to be redistributed based on their algorithms, and requirements about the cleanliness and maintenance of the vehicle, but they also have weak control in other areas by not dictating work hours and a few other details. Ebay has zero control. STRONG FAIL, Uber's heavy control over what drivers do pushes strongly toward employee.
Opportunity of P/L test. Uber sets the fare cost, and takes a cut, the driver gets no options. There is no opportunity for additional profit or loss. Nothing they do personally can modify their results, get more business, get better rates, or otherwise modify the opportunity of profit and loss. For the ebay example, Ebay sellers can operate under whatever terms they choose, including running full brick-and-mortar stores, which many sellers start and operate as. STRONG FAIL, these "independent contractor" Uber drivers cannot operate as a business independently.
Level of skill/business acumen test. Uber drivers are hired for being able to drive. They cannot really market themselves independently, take good advantage of business insights, leverage their own personal strengths, modify their business based on any personal skills or talents. Nothing they do personally can modify their products or results. Strong contrast with Ebay where sellers have a large degree of control over what they do and how they do it, what they sell
//TODO: Think of witty sig statement
Well, except you're not allowed to eat these particular fish - California claims them as an endangered species.
Quo usque tandem abutere, Nimbus, patientia nostra?
Dear Californians,
Please stay in California. Do not listen to parent.
Signed,
Concerned in Oregon