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.

Comments

Business model?

[Anonymous Coward]

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.

Re:Business model?

[iluvcapra]

Well, road capacity isn't an unlimited resource, and it'd be difficult for the city to set a price for road access in such a way that made sure taxi operators were paying for the congestion they were causing while at the same time protected the incumbent homeowner's rights to street access for free. If we're just going to say up front that if you want streets that are passable you'd better pay up the nose for it, that'd make Manhattan effectively unlivable except for the very, very rich, even worse than now.

You can't let "natural" forces limit how may taxis are on the road, it'd be constant deadlock because the road is a commons. If you only want so many taxis passing in and out of the city at any one time you either have to set up medallions, or a congestion charge, or a per mile charge or any number of complicated solutions that have to take into account incumbent stakeholder's proprietary interests.

And yeah the medallion system is a "mistake" in the sense that it's inefficient, it might not be a Pareto-optimal economic solution, and it definitely encourages rentierism, but it was a practical solution that was the most politically feasible at the time. If we're saying we value democratic institutions, a strong city government, the rule of law, and stable consensus among powerful interests, medallions are the perfect solution. On the one side you've got guys who want to run taxis, who think it's their right to run a taxi wherever they please whenever, charge whatever they want and run their cab in whatever way they please, and on the other you've got people who live in a city that don't want their roads clogged with taxis picking up fares, who want the taxis all to follow the same rules, charge predictable prices and be safe. Both of these people have to share a city, they resolve these disputes with politics.

I don't know about this general line of argument as it pertains to NY taxis, since NY taxis are pretty good and Uber doesn't have much on them. It makes a lot more sense in places like, say, Los Angeles or the midwest where taxi service is terrible, but then again taxis in many of these parts of the country don't implement hack medallions.

WTF????

[gstoddart]

That could affect its valuation, currently above $40 billion

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.

Re:Uber doesn't own the vehicles, correct?

[ShanghaiBill]

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.

Re:Uber doesn't own the vehicles, correct?

[Anonymous Coward]

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?

Re:California

[rogoshen1]

Dear Californians,

Please stay in California. Do not listen to parent.

Signed,

Concerned in Oregon