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Uber Drivers Deemed To Be Employees By Swiss Insurance Provider (techcrunch.com)
An anonymous shares a TechCrunch article: Uber has suffered another setback to its operational model in Europe after a Swiss insurance agency ruled that Uber drivers are employees, not freelance contractors as the company claims -- meaning it must pay social security contributions. This follows a similar ruling by a UK employment tribunal in October which found that the two Uber drivers bringing the claim were employed as workers by Uber, rather than being freelance contractors. Swiss broadcaster SRF says the Suva agency made its decision on the status of Uber drivers in the market on account of their inability to set price or payment type, and because they are threatened with consequences from Uber if they do not fulfill its requirements. The Suva described its decision on the classification as a "clear conclusion." The public sector insurer is involved in determining whether workers are freelance or not as a provider of compulsory on-the-job accident insurance which is required for certain high risk professions.
Wow, and I thought I was quite the jaded nihilist...
I suppose I see it that if human beings have the ability to work together for collective endeavors, like government, then there's no reason why we should not try to structure such to get the best balance of outcomes.
Companies like Uber and Lyft are not "ride sharing" companies despite whatever verbiage they attempt to use to describe themselves. They're passenger livery services. Laws that govern the passenger livery service apply to them whether they want them to or not. Also, the way they've structured themselves, they retain enough control over those that work for them to where those individuals are employees. They're running the opposite of the taxi model where the drivers actually are contractors in many cases; lots of taxi companies lease the car to the driver for a daily figure, provide dispatch for pickups if the driver wishes, and otherwise the driver is free to use the car to transport all the fares that the driver can, local laws (like airport rights) not withstanding. Those taxi drivers can drive as much or as little as they want, and short of engaging in bad behavior that reflects on the car owner, doesn't have a lot to answer for to the company itself.
By so tightly controlling the drivers and how they're compensated it's clear that the drivers are not simply contractors, and the only other class by and large is employee. And in my view that's as it should be.
Do not look into laser with remaining eye.
Agreed with all. But I'll take a stab at those other reasons.
First, around here anyway, any "business owner" needs to have more than one client, to be able to call that business a business and pay taxes accordingly. That means that an Uber driver would need to drive for more than just Uber to be considered a driver-for-hire. It's true for bakers, and for candlestick makers around here. I can't have a programming business if I only program for one client. I used to need to prove that to my clients' accounting departments, or they'd start taxing my business revenue, as though it were personal income.
Second, Uber just set a policy of zero sexual conduct between drivers and passengers. That's not a thing that a client can do to contractors. Can certainly fire contractors for it, but can't promise passengers that contractors will do or not do anything. Can only refund payments at the Uber level. Can't even dodge paying the drivers -- because policies aren't contractual.
How'd I do?
Where I come from, cabs, and livery (airport limo) vehicles, i.e.: the vehicles themselves, have to undergo a state safety inspection every six months or N miles, whichever comes first, same as school buses and other commercial vehicles. Because without that, people and companies would cheat and cut corners: they'd be driving passengers around with bald tires, worn-out brakes, broken suspensions, etc., and the unsuspecting passengers would be put at risk by the operator's greed and laziness.
Also, the drivers themselves need to have a Public Chauffer's License, meaning (minimalist) special training, clean background (no DUIs, etc.) and periodic drug/health* testing. Again, without that, people (potential drivers) would cheat. What's the acceptable/allowable Blood Alcohal Content??
Uber seeks to outflank all of that: the vehicle condition is the subcontractor's responsibility, the drivers fitness is the subcontractor's responsibility, all Uber does is makes a profit.
My question is: how long before some front-page uber**-tragic wrongful death lawsuit drives them out of business?
* Think: diabetes and epilepsy
** OK, pun intended, mea culpa
The definition of "employee" varies by country. But in the U.S., the distinction is based more or less on who dictates how the work is done. If you give a person a task to complete, and the person is free to complete the task when and how they want (subject to a deadline and requirements), then they are a contractor. But if you dictate how or when the person has to work, then they are an employee.
So it's not just about dictating work hours. A good analogue is workers from a temp agency. The temp agency matches up temporary jobs with temporary workers, but the workers are considered employees of the temp agency. If they tried to act like Craigslist or eBay - simply providing a place for people looking for temp work and people looking to hire temp workers to meet up, and took a cut of the payment - they'd probably be classified as contractors. But when you start to meddle with the individual transactions (creating uniform pricing, dictating standards for worker behavior, etc) you're starting to encroach on employee territory.
Further, the passengers are not the driver's clients, they are Uber's
The moment you start down that road Uber is a taxi service, which they very strongly insist that they are not. They're just a matchmaking service, like eBay for car rides. The "ride sharing" are private agreements between drivers and passengers, Uber just takes a commission like on eBay. At least that's their narrative on the customer side. Their problem is that they're not really much like eBay at all, when you start regulating in detail what you can sell, how you can sell it and to what price sooner or later you'll cross the line where you're not an independent seller but a store employee.
It's like trying to claim the fry cook at McDonald's is an independent contractor delivering burgers and the company just takes a commission for matching him with hungry customers, even though they decide the menu, branding, price, commission rate, opening hours and everything else. You could simply stop driving for Uber any time, but in an at-will state you could walk out at any time. That alone doesn't make you a contractor.
Live today, because you never know what tomorrow brings
The precise rules differ from jurisdiction to jurisdiction, but on a balance what I'm seeing is that in multiple jurisdictions in Europe and North America, Uber's relationship with its drivers is viewed by taxation and labor authorities as being a employer-employee relationship. Here in Canada, I've had experience with how the Canada Revenue Agency (our version of the IRS) views contractor vs employee, and it applies similar standards that basically amount to "if it walks like a duck and quacks like a duck, it's a duck". Over the years I've seen many an attempt by employers large and small to treat what are clearly employees as private contractors for the purposes of ducking their responsibility on collecting and remunerating payroll taxes to taxation authorities, not to mention hoping to sneak past overtime pay and other labor rules like meal breaks. It's a scam some employers keep trying over and over again, so Uber is hardly the first company to try to pull this stunt.
Of course, the real irony of Uber is that even with this withholding tax-dodging scheme, they're still losing vast amounts of money, so I expect that once many jurisdictions force it to treat its drivers as employees, it will either collapse or just turn into a regular taxi service.
The world's burning. Moped Jesus spotted on I50. Details at 11.