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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.
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.
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.
Comment removed based on user account deletion
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?
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.
And contractors need to take special precautions as well. Uber basically needs to work out a fixed term contract, then kick the driver off Uber for some time - it must be clearly obvious they are contractors and not employees, and are completely free to pursue other jobs in the meantime.
It's on a per-driver basis, yes, so Uber needs to make sure drivers know they cannot work for Uber for more than X months without taking time off, or finding alternate work (e.g., for Lyft) because they need to show independence from Uber.
This can mean that an Uber driver will sign in to both Uber and Lyft and choose jobs from either - while they are logged into Uber, they cannot be exclusively on "uber-only time" (since Uber doesn't consider them to be working for Uber yet).
As for taxis - remember that taxis often have limitations. E.g., you must be able to offer accessible service - if you don't, then you must arrange for accessible service. So if you're a taxi and a handicapped person hails you, and you're not accessible-equipped, the legislation often says said driver must not only hail an appropriate cab, but ALSO STAY WITH THE FARE until picked up. No "oh I didn't know you were handicapped, see ya sucker" - the driver is forced to stay with the fare until an appropriate ride is available. Plus a whole pile of other anti-discrimination and other laws.
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.
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
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?
Almonds should be grown somewhere else where water is available.
Which is why Uber drivers are considered employees instead of contractors.
Dear Californians,
Please stay in California. Do not listen to parent.
Signed,
Concerned in Oregon
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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