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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.
That's the place where they use water on almonds instead of people, right?
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.
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
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.
Does this mean by extension that the "bloggers" who contribute to the Huffington Post are employees?
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
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.
It doesn't work that way. And the IRS would like to have an expensive discussion with you about that.
Facebook is billions of individual "Skinner Boxes." And if you use it you are the pigeon!
How are they wrong exactly? You disliking their decision does not make it wrong.
Anyone can have multiple jobs...
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.
Hmmm ... is there any evidence of this "Illumitaxi" conspiracy? Or are you simply off your meds?
Where I live, the taxi companies were forced to install security camera, over their objections, when a passenger was assaulted by a cab driver.
They quickly changed their tune when one of their own drivers was violently robbed. Since then it has been used to solve several crimes.
They're also forced to conduct regular inspections, and have cars no older than a certain age.
So, if municipalities are passing laws, over the objections of taxi companies, for passenger safety and accountability ... WTF insane conspiracy theory is required to assume this is about some powerful taxi cartel calling the shots?
How about municipalities have passed laws saying commercial vehicles for hire operate under a set of rules, and Uber claiming those rules don't apply is nothing more than bullshit wishful thinking?
Honestly, this crap about the taxi cartel makes you sound like a crazy irrational fool who needs to find a conspiracy for no reason other than you think is sounds good.
Laws regulating these kinds of industries have existed for decades, and the taxi companies have to suck it up and follow them.
Since when does some asshole with an app get to be exempt from laws? That's some silly bullshit right there.
Lost at C:>. Found at C.
Comment removed based on user account deletion
With that reasoning, if I drive for multiple services, who is responsible for providing benefits? All 6 different applications, er. companies? A combination of all?
Depends on which companies you'd be classified as an employee of them and what the terms of the benefits are in your resulting employment contract. Possibly none if you aren't considered an employee.
Unfortunately, this is not as cut and dry as you believe.
I never said anything was cut-and-dry. I in fact stated the opposite as opposed to the AC GP which tried to claim the situation was cut-and-dry just because they owned their own cars. It's an entirely subjective decision based on many factors.
The majority of uber drivers also drive for different services.
Which doesn't mean you can't be classified as an employee of one or all of those companies. There are plenty of people with multiple jobs and they are all still considered employees of each of the companies they work for.
Let's not forget the whole medallion system was created in NYC because in the 30's there were so many cabs that emergency vehicles had trouble moving around the city, among other reasons such as the public was worried about maintenance on the taxis and that the drivers were working 16 to 18 hours a day. The other option besides the medallion system was to have the city take over the cabs.
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
Uber pointed out that the ruling only applies to one driver.
Translation, "We're getting what we want as cheaply as possible, screw everyone else."
Go on, citizen, stamp the vote card. R or D, your choice.
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.
Will California now say that anyone renting out their spare bedroom is an Airbnb employee? Why stop there? Aren't full-time eBay sellers doing the same thing, and shouldn't eBay have to make them employees too?
Uber replaces all their drivers with H1-B visa workers.
If telephones are outlawed, then only outlaws will have telephones.
When I was a contractor, my hours were fixed. I worked for one client. The price was negotiated, but I negotiate my salary the same way. Project management may require and review your work breakdown structure, adjusting how you'll schedule the work, to maximize stakeholder engagement and minimize expensive mistakes and rework. Contracts may be Fixed Fee, Cost plus Fixed Fee, Time and Materials, or Fixed Fee Plus Awards: a Time and Materials reimburses your costs and pays for your time, while a Cost plus Fixed Fee reimburses your costs and pays for your estimated time.
People have funny ideas what a contractor is. It's just a legal agreement. The real question is do you pay them by W2 or 1099?
Support my political activism on Patreon.
Am I missing something here?
Yes, you are.
I don't understand this analogy.
Car analogy anyone?
I'd post one, but... most small shop car mechanics are independent contractors. They own their own tools (like Uber drivers own their own cars), they carry their own insurance (like Uber drivers carry their own insurance), they set their own hours (like Uber drivers set their own hours), they can decline a specific job (like Uber drivers can decline a specific job), they can work for other shops (like Uber drivers can work for other car services or elsewhere), and they have a written contract (like Uber drivers have a written contract).
So really, there is no car analogy that supports the GP's proposition.
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.
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.
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.
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.
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.
Auto mechanics purchase their own standard tools, sockets, screw driver, pliers, etc
I believe that they also purchase their own metric tools.
*There's obviously no guarantee of demand, just as there's no guarantee there'll be a car nearby when you request one...
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.
FexEx drivers are not independent contractors.
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.
---
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
you are insisting on blaming the victims for not stopping your owners from screwing everyone else over.
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.
But it's common to dictate what materials they use. Want a modified bitumen roof? If it's torch-down, then that's going to require the contractor to have certain tools. You could also mandate it's peel-and-stick (say, if the building is occupied and you don't want the fire hazard), which is dictating materials/tools.
Same with eBay or Amazon. All they require is internet access with a newish web browser.
Which means a limited number of possible browsers, which all require newer equipment, not a 25 year old computer.
...rambling about hours and nakedness
A construction contractor is often mandated to work within certain hours, can't work naked, can't smoke on the job, etc.
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.
Selling on Amazon or Ebay requires a post-2000 browser. It doesn't work on specific browser versions. They have standards and limitations on the products they allow you to sell.
So pretty much all the limitations you're saying makes Uber drivers employees also applies to Amazon/Ebay sellers and/or construction contractors.
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.