California Overturns Uber's Appeal: Its Drivers Are Employees, Not Contractors

An anonymous reader writes: Uber's third attempt to overturn a California court ruling stating that its drivers are employees and not contractors has ended in failure, with the appeal dismissed by the California Employment Development Department (EDD). The California Labor Commission ruled in June on the matter, and in a later appeal one judge effectively decided that the difference between 'firing' a driver and deactivating their account is purely semantic.

Comments

Re:so when

[thaylin]

Does EBAY, facebook, or youtube prevent you from selling your products if they dont like who you are selling them too? Or dont use specific things? methinks you did not read the article.

Re:so when

[ndavis]

Only if eBay is telling you what computer to use, when to use it , when you can list and what you can charge. Oh and they can dictate that you are not allowed to use competitive services while listing an item on their site. Not sure how Facebook and YouTube fit into this as they are services that you use for free via advertising.

Re:What's the difference?

[whoever57]

What's the difference between an employee and a contractor? The contractor doesn't receive any benefits. Since the uber drivers do not receive benefits, they are contractors.

False dichotomy. Many employees do not get benefits.

Yes, they are employees

[duckintheface]

There are many reasons why drivers should be classified as employees rather than as contractors. The most obvious is that drivers don't price their own services. The labor laws were specifically written to protect people who are working for much more powerful companies which will treat them as serfs if they can get away with it.

Re:Yes, they are employees

[Anonymous Coward]

Based on this reasoning, pretty much every franchisee ever is an employee, not an owner.

Take a close look at the ads sometime. See that asterisk? Follow it to the matching asterisk that says "prices may vary".

A franchiser often does set "recommended prices". And products, but the franchisee has some discretion, and that's the difference between them and employees.

Granted, when you're talking operations the size of McDonalds, there's not a whole lot of discretion allowed before they simply yank your franchise and give it to someone else, but that's the Free Market for you!

Re:Yes, they are employees

[edtice1559]

Because the worker doesn't have the negotiating power. The current case is the one that proves your point. Some Uber workers want to be contractors, others want to be employees. But it doesn't matter what they want. Uber declared them to be contractors and they have no recourse except the government. An easier example is if I hold a gun to your head and demand your wallet. Yes you voluntarily gave it to me, but it's still not acceptable. The government is simply defending the powerless here the same way as police defend mugging victims.

Re:Yes, they are employees

[ShanghaiBill]

There are many reasons why drivers should be classified as employees rather than as contractors.

Yes. There are 20 reasons. Here is the list.

The most obvious is that drivers don't price their own services.

In some ways the drivers are treated like employees, and in other ways they are treated like contractors. Uber may be able to shift the balance enough to satisfy the courts, and the IRS.

Like employees:
- Uber sets the price
- Uber prohibits drivers from offering services outside of the Uber App
- Uber drivers are an integral part of Uber's business
- Uber drivers cannot subcontract
- Uber drivers are trained by Uber
- Uber drivers must follow specific procedures
- Uber drivers can quit or be fired at any time

Like contractors:
- Uber drivers set their own hours
- Uber drivers own their own equipment
- Uber drivers are not required to work full time, or a minimum or maximum number of hours
- Uber drivers do not work on Uber's premises
- Uber drivers are not directly supervised

Re:Yes, they are employees

[duckintheface]

Of course they have a gun held to their head. It's called hunger. It's called being able to pay the rent. Many of the drivers for Uber are in the business of converting equity in their cars into payments from Uber. That is not necessarily a profitable exchange and many drivers don't realize that until their car breaks down. Uber drivers are not paid for the time they spend sitting in their car waiting for the next gig. And if you include that time, they are paid below minimum wage in many cases. That is what the labor laws are designed to prohibit.

Re:Yes, they are employees

[duckintheface]

Uber will be moving to self-driving cars as soon as they can. They are just trying to string out the "contractor" subterfuge until the technology is ready.

Re:Yes, they are employees

[kwbauer]

Who was holding the "gun" to the head of the Uber drivers and demanding that they drive for Uber?

Re:Yes, they are employees

[GlennC]

Many of the drivers for Uber are in the business of converting equity in their cars into payments from Uber. That is not necessarily a profitable exchange and many drivers don't realize that until their car breaks down. Uber drivers are not paid for the time they spend sitting in their car waiting for the next gig. And if you include that time, they are paid below minimum wage in many cases.

You say that with the expectation that the "Libertarian/Anarcho-Capitalists" who love Uber care about such things.

They don't.

They only care about getting what they want as cheaply as possible, screw everyone else and damn the consequences.

Re:Yes, they are employees

[Actually, I do RTFA]

Who was holding the "gun" to the head of the Uber drivers and demanding that they drive for Uber?

Landlords, grocers, doctors, pharmacists, clothiers, electric company, water company, some cellphone company, public transit (well, actually, not that one...)

It costs a lot to continue to live

Re:Yes, they are employees

[danbob999]

from TFA:

According to the administrative law judge who heard the first appeal, Uber has sole discretion over fares, and can charge drivers a cancellation fee if they choose not to take a ride, prohibit drivers from picking up passengers not using the app and suspend or deactivate drivers' accounts.

Based on that, "there was in fact an employer/employee relationship", according to the decision.

I agree with the judge on one point: if they were independent contractors, they would be free to pickup passengers not using Uber.

Re:Yes, they are employees

[bluefoxlucid]

Meaningless words. In certain kinds of writing, particularly in art criticism and literary criticism, it is normal to come across long passages which are almost completely lacking in meaning. Words like romantic, plastic, values, human, dead, sentimental, natural, vitality, as used in art criticism, are strictly meaningless, in the sense that they not only do not point to any discoverable object, but are hardly ever expected to do so by the reader. When one critic writes, "The outstanding feature of Mr. X's work is its living quality," while another writes, "The immediately striking thing about Mr. X's work is its peculiar deadness," the reader accepts this as a simple difference of opinion. If words like black and white were involved, instead of the jargon words dead and living, he would see at once that language was being used in an improper way. Many political words are similarly abused. The word Fascism has now no meaning except in so far as it signifies "something not desirable." The words democracy, socialism, freedom, patriotic, realistic, justice have each of them several different meanings which cannot be reconciled with one another. In the case of a word like democracy, not only is there no agreed definition, but the attempt to make one is resisted from all sides. It is almost universally felt that when we call a country democratic we are praising it: consequently the defenders of every kind of regime claim that it is a democracy, and fear that they might have to stop using that word if it were tied down to any one meaning. Words of this kind are often used in a consciously dishonest way. That is, the person who uses them has his own private definition, but allows his hearer to think he means something quite different. Statements like Marshal Pétain was a true patriot, The Soviet press is the freest in the world, The Catholic Church is opposed to persecution, are almost always made with intent to deceive. Other words used in variable meanings, in most cases more or less dishonestly, are: class, totalitarian, science, progressive, reactionary, bourgeois, equality.

Federal contractors working for the IRS, who ostensibly defines what a contractor is, meet your definition of "...are really employees."

You can't possibly argue that Uber drivers aren't contracting their services. They take bids for work; they're not employed by the company to go out as service providers, but rather take bids for services requested from the company by its clients. They can opt when to drive for Uber, and can decide to drive only where and when convenient for them, and only when the rates are sufficiently high or the job looks good (pick up cute girl at bar, take back home, jackpot!!!).

Your only argument is a bureaucratic argument: can you define "contractor" in some way that doesn't rely on if a person is taking bids for short contract work, but rather relies on some nebulous and flexible ideas of your own which may not exactly match up with any other person's ideas of what a contractor is? The first step, of course, is getting away from this idea that "contract work" means anything, and arguing that a person may take contract work but *technically* be a sort of "employee" even though he's really an obvious contractor.

It's a great way to mislead an argument for the purposes of your political agenda.

Re: Yes, they are employees

[Anonymous Coward]

And neither will computers in the home.

Re:Yes, they are employees

[duckintheface]

This is a dodge. All the "bids" come from Uber itself, not directly from clients. No negotiation takes place on the individual "bids"... it's take it or leave it. This is the typical management/employee tension. Management tries to keep all the authority and pass all the responsibility to the employee. In this case, the filter for doing that is called an app, but it's the same raw deal for the employee.

Re:Looks like the VCs found their unicorn

[Anonymous Coward]

If Uber doesn't want them to be employees, they need to stop treating them like employees; or did you not read the ruling?

Economy

[fluffernutter]

Anyone who accepts restrictions from a company and yet doesn't want full labor protection of an employee is either totally naive about how tenuous their situation really is, or is experiencing desperation brought on by a totally shitty economy. Either way, I applaud the California decision, because corporations should not be taking advantage of either.

Re: Looks like the VCs found their unicorn

[Anonymous Coward]

Uber would have been better off arguing that it's drivers are customers, who sign up for a service that allows them to earn money. The people who ride in the cars aren't the customers, they are the product.

Is the gig economy a good thing?

[ErichTheRed]

There are all sorts of arguments about why Uber should or shouldn't have to act like a traditional taxi company. But in my opinion, that's less important than this question, for the broader economy and labor force. Social media, tech publications, and even the MBA rags have had all sorts of glowing stories about the "gig economy." Basically, they argue that the flexibility offered to workers by allowing them to string together contract jobs to make income outweighs the stability of traditional employment. Uber is cited as an example on the low end, day laborer style side, and of course, high flying "technology consultants" making $150+ an hour are put up as shining examples of why this should be the future of employment.

I'm far from a Luddite, but I'm a big believer in stability. Especially as you acquire a family and grown-up responsibilities, life in the US revolves around a steady income, health insurance and a way to save for retirement. The high-flying tech consultants can arrange for these things, but lately I've been seeing more of these cheerleading articles advocating for all employees to switch to this model. Most average employees don't have the motivation or skills to market themselves the way these consultants do, and they may lack the skills that would make them good contractor candidates.

It just seems to me that companies want a disposable labor force that they don't need to pay benefits, vacation, etc. for. Basically, they want to go back to a pre-Depression era where workers just turn up at the factory gates every morning and hope to get work. That may be appealing to Millenials who don't have any family ties and will move at the drop of a hat. If we have to go this way, then things like real estate transactions need to be streamlined, life has to be restructured around variable income levels, etc. and I think society isn't ready for it yet.

Re:Is the gig economy a good thing?

[drinkypoo]

It just seems to me that companies want a disposable labor force that they don't need to pay benefits, vacation, etc. for. Basically, they want to go back to a pre-Depression era where workers just turn up at the factory gates every morning and hope to get work.

The last backlash led to unions, worker's rights, etc. Will the next one lead to a Minimum Guaranteed Income? If we had that (and working national health care, not just health insurance) then we could work for any amount which suited us.

Re:Is the gig economy a good thing?

[plopez]

"But min wage is too high for those jobs"

Huh? Are so clueless?
1) Min. wage is in no way a living wage
2) If we can continue to give huge pay increases to CEOs and pay dividends to investors of companies that lose money then we have plenty of money to go around.

Stop with propaganda.

This is great!

[MarkvW]

Uber wants all the benefits of being an employer with none of the responsibilities.

If you listen to Uber, every worker is an independent contractor and all the employee protection laws we fought so hard for over the last century don't apply any more.

Make the same ruling for Papa John's Pizza

[Khyber]

The company and its franchisees pull the independent contractor status all the goddamned time while doing all they can to violate California law - charging you for uniforms (illegal under CA law) deduction of tips from credit card purchases (illegal just about anywhere) refusal to pay mileage reimbursement (IRS law violation) and much, much more.

John Schnatter is a class-A business criminal and needs to be taken to task by the courts.