Uber Drivers 'Employees' For Unemployment Purposes, New York Labor Board Says (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: New York City's largest taxi driver advocacy group is hailing a legal decision by the New York State Unemployment Insurance Appeal Board, which ruled last Friday that three out-of-work Uber drivers can be considered employees for the purpose of unemployment benefits. The decision was first reported Thursday by Politico. In other words, three men -- and possibly other "similarly situated" Uber drivers who had quit over low pay or who were deactivated from the Uber platform -- can get paid. "The decision means that New York Uber drivers can file for unemployment insurance and likely receive it," Veena Dubal, a labor law professor at the University of California Hastings College of the Law in San Francisco, emailed Ars. "Uber may appeal the decision to state court, but for now, it's good law."

Comments

About time

[110010001000]

It is about time someone told Uber what they really are: an illegal taxi service!

Re:About time

[alvinrod]

Make it difficult enough for people to engage in commerce legally and this is what you get. If government law or regulation where sufficient to direct human behavior, there'd be no war on drugs.

Personally I don't mind if Uber wants to have independent contractors, but I think the real sticking point is letting them set their own prices. As much as Uber wants to think they're the good guys in all of this, I think they'd be much better off if they just acted as a way to connect drivers and passengers. The technology that enables Uber to begin with would make it ridiculously easy for both drivers and consumers to negotiate their own rates. This would allow drivers to earn better wages and allow customers to spend more or less as they desire.

Re: About time

[saloomy]

That sounds like a brilliant idea. Why don't you build a platform?

Should be simple.

Re:About time

[Anonymous Coward]

About time for corporate WELFARE?

Re: About time

[alvinrod]

The idea isn't anything special or that complicated, but regardless of how you wanted to determine prices, building a platform for a taxi service is hardly simple. At a minimum you'd need a mobile app for both drivers and passengers, a map platform, a back end to track all of the drivers and customers, and you'd need to build a system to handle collecting payments from customers and dispersing them to the drivers, as well as an ability to handle taxes for everything. Some of that could be done using third parties, but that's going to add up in terms of cost.

If anyone wanted to start doing this, the likely path would be to have a small team implement something for a single city (that isn't terribly large) and try to attract a huge amount of venture capital. This is almost something that would work better as a layer that sits on top of Uber, Lyft, or any other taxi service and finds the best matching offer among them. However, even that isn't easy as those individual companies don't have any reason to participate or allow you to interface with their platform.

Re: About time

[saloomy]

I'm sorry but that's not entirely true. You can leverage online services like open maps or use someone else's like googles. You can also use cloud infrastructure to do most of the heavy lifting for you. All you neee is the business license, and some programmers to build your interfaces, and a payment gateway to collect and distribute fees. Your business model has to accommodate for your costs of course, and you will need to get your code checked and approved.

No, the hard part is critical mass. No driver is going to try and drive for you unless you have riders. No riders will want to use your app unless you can supply them with drivers. The go-to-market is the hard part. Uber cracked that by early on incentivizing drivers to stay with them, and marketing to riders in a niche are (San Francisco).

Re:About time

[Anonymous Coward]

Hey, you want to hagle your prices, that's fine, but i don't want to start arquing about prices when i need to get somewhere. Variable pricing sucks ass. And nothing, i repeat, NOTHING qguarantees there will be any chance to spend less.

frist poss

[Anonymous Coward]

That's why I'm unemployed...

Have they ever paid the insurance premiums?

[mi]

New York State Unemployment Insurance Appeal Board

Have these people had the insurance premiums deducted from their pay — either explicitly, or otherwise? If not, then it is neither "insurance" nor victory for anyone, other than the rent-seeking government bureaucrats.

Re:Have they ever paid the insurance premiums?

[stephanruby]

Have these people had the insurance premiums deducted from their pay — either explicitly, or otherwise?

It doesn't matter.

If a company doesn't deduct unemployment benefits and they fire you. The government will still go after that said company for the backpayments it hasn't paid.

Re:Have they ever paid the insurance premiums?

[Anonymous Coward]

In New York you can "quit over low pay" and then collect unemployment............

Re:Have they ever paid the insurance premiums?

[mi]

The government will still go after that said company for the backpayments it hasn't paid.

Has anybody gone after Uber? The write-up does not mention this, and TFA, which I skimped, is unclear.

The Board has a conflict of interest, though, this is something, independent judiciary ought to decide.

Re: Have they ever paid the insurance premiums?

[Anonymous Coward]

To answer your questions: Yes, and thatâ(TM)s already the case. The case being reported on is former drivers going after Uber with a now successful complaint filed with the agency that will collect unemployment backpayments. The very short blurb specifically mentions that Uber can appeal.

Re:Have they ever paid the insurance premiums?

[Anonymous Coward]

... has a conflict of interest, though ...

How so? It's not their money, their business, or their job.

What is the conflict distorting: That piece-meal work isn't employment, that workers aren't covered by insurance, that Uber decided to not pay?

Enterprises like Uber are allowed to cheat on two fronts; 1) denying their workers are employees, 2) not paying the US federal $9.25/hour (including tips) minimum that all employees are entitled to.

... independent judiciary ought to decide.

SCOTUS loves to claim that corporations have more rights than people (See: the soon-departing justice) but it's difficult to argue that they'll excuse Uber from their legally-mandated fiscal responsibilities.

Re: Have they ever paid the insurance premiums?

[Anonymous Coward]

Yeah bullshit. Contractors and employees are very well defined by the IRS and uber drivers are clearly contractors. They bring their own tools , pick their hours and can decline tasks

Re: Have they ever paid the insurance premiums?

[Daralantan]

Also I'm confused.... the summary makes it sound like one of the three drivers quit? Maybe it's different per state, but I thought unemployment only came from when you were laid off or fired somehow. Not when you quit voluntarily.

Re: Have they ever paid the insurance premiums?

[kenh]

That's not how it works. Employers and employees pay into an insurance fund, and unemployment benefits are paid from that fund. If neither the employer nor the employer paid into the unemployment insurance fund, on what basis will they be paid?

How will their unemployment benefit be calculated? Gig economy/piece work isn't the same as an hourly wage.

So does this mean Uber drivers will now be expected to pay for unemployment insurance?

Makes absolutely no sense

[Anonymous Coward]

So if I download the app, drive some buddy's around and then uninstall the app or break my phone I can now sign up for unemployment insurance?

That's bullshit on its face. And I don't want to see responses about how it only applies if Uber cancels them that's just another stupid, politically assigned, labor board decision away.

Re:Makes absolutely no sense

[Anonymous Coward]

Some buddy's what, you ignorant asshat?

Re:Makes absolutely no sense

[stephanruby]

If you get yourself a job, work for 8 hours, and get yourself fired after a week, you won't qualify for unemployment.

If that were possible, everybody would be doing it. Obviously, the same rules still apply.

Re:Makes absolutely no sense

[HornWumpus]

Most places you could qualify, but your benes would be next to nothing.

Re:Makes absolutely no sense

[Anonymous Coward]

He OBVIOUSLY meant to say "drive somebodies around".

Unemployment Insurance is just that

[rsilvergun]

Insurance. Businesses usually have to pay into it. Will Uber be required to pay into it now?

In some districts businesses are not. If an ex-employee makes a claim and the business still exists then the state will come after them for the money. This has the unpleasant side effect of making it so businesses fight tooth and nail for excuses why the employee was fired and not laid off. I've witnessed employees written up 3 times in 1 day for the express purpose of firing them.

Also in a lot of places the people who decide if you were fired or laid off are arbitrators hand picked by the companies. You can imagine how well that goes. Had a legally blind buddy of mine who used to take the bus to work quit when the site moved to a place with no bus line. He was approved for unemployment but later forced by an arbitrator to pay it all back (with interest). The reasoning was there was ride sharing at the new site. It was about 6 months after we got to the new site that they announced a new ride sharing program....

Not saying I oppose unemployment, but it should be paid for by tax dollars and should apply regardless of why you were fired if you've had 90 days of continuous employment. The point isn't to protect the unemployed, it's to protect the employed from a massive number of desperate people taking jobs to eat. If you like the wages you're making now you'll understand why we need this.

Re:Unemployment Insurance is just that

[Anonymous Coward]

yes, at least in new york state they will have to pay into the unemployment insurance fund.

the kicker is.. once they start doing that, they're pretty much saying that our workers are, in fact, employees and not 'contractors', and then the shit will really start flying... first in new york, then elsewhere. it'll be fun to watch uber burn.

Re:Unemployment Insurance is just that

[drinkypoo]

"Not saying I oppose unemployment, but it should be paid for by tax dollars and should apply regardless of why you were fired if you've had 90 days of continuous employment"

Just another social welfare program obsoleted by UBI.

Re:Unemployment Insurance is just that

[b0s0z0ku]

Either burn, or do a crash (hah!) program to automate drivers' jobs away.

Re:Unemployment Insurance is just that

[Maxo-Texas]

Unemployment insurance in my state is *your* money. The company takes it from your pay and pays it to the government.

Once you hit $11,800, you lose the excess.

Which is odd since, you get no benefits normally unless you have a balance with the unemployment agency.

I.e. if you use your $11,800 then get a new job and pay $1078 dollars and then lose your job, you are only eligible for $1078 dollars.

Not sure what happens with the money over the $11,800 cap.

How do they determine termination reason?

[misnohmer]

When an employee quits of their own volition or is fired with cause (say they didn't show up for their shitfs), they are not eligible for unemployment benefits. If they are laid off, they are eligible. Does the same apply here, or is quitting a gig-economy job considered an involuntary layoff? If the latter, it seems to open the door for massive abuse - people just have to quit their job in order to work for Uber, then a day later quit Uber and collect unemployment (since their original job earnings would provide the basis for premium calculation). Good intentions from the government, bad implementation.

Re:How do they determine termination reason?

[Maxo-Texas]

It depends on the state. In some places, you are still eligible for the money after a penalty period.

We have 50 (or more) sets of state unemployment rules.

Um... no, this is not what you get

[rsilvergun]

this is what you get when you have regulations about how poorly a business can treat it's workers and then you do not enforce those regulations.

We can make it _real_ easy to engage in commerce if you like. It wasn't hard at all to ship slaves in the 1800s...

Re:Um... no, this is not what you get

[Anonymous Coward]

Seems it's just about time, before the dawn of AIG.

bye!

Re:Um... no, this is not what you get

[CrimsonAvenger]

It wasn't hard at all to ship slaves in the 1800s...

Which, no doubt, explains why it became illegal to import slaves in 1808...

What's that? You didn't know that that stopped that early? Why am I not surprised...

do it.

[Anonymous Coward]

So if I download the app, drive some buddy's around and then uninstall the app or break my phone I can now sign up for unemployment insurance?

That's bullshit on its face. And I don't want to see responses about how it only applies if Uber cancels them that's just another stupid, politically assigned, labor board decision away.

How about you do exactly that, try to collect benefits and learn how the system works.

There's more rules than that

[rsilvergun]

a company can't, for example, hire you under false pretenses. They can't hire you for IT work at $80k/yr and then tell you to scrub toilets for $8/hr. They also can't hire you for 40/week and work you for 5/week twice a month.

That said, after 40 years of right wing people in charge of this country (closest we got was a moderate in Obama) these rules are very, very poorly enforced, even in left wing states like California & NY. Sucks too. Your wages are appreciably lower as a result. Remember, unemployment doesn't exist to protect you from losing your job, it exists to protect your job from the recently unemployed.

It's not quite that easy.....

[mschuyler]

This is how unemployment works. There may be variations between the states, but this is the basic idea.

1. Unemployment is funded by a tax on worker salaries, typically a percentage (like 3.5%) EVERY worker is taxed whether they get unemployment or not. The amout of tax is tied t an EXPERENCE RATING, so that an employer who frequently lays off people has a higher rate than an employer that has been very stable for years. An alternative to the tax FOR SOME EMPLOYERS (typically government) is on a reimbursable basis, i.e.: Dollar for dollar. If you get dollars from unemployment, your previous employer pays the full amount.

2. Unemployment is calculated on a BASE YEAR which is the previous year, minus a LAG QUARTER, not including the quarter in which you filed. So if you file today, July 20, quarter THREE is your FILING QUARTER, and quarter TWO (April, May, June) is your LAG QUARTER, therefore your BASE YEAR is April, 2017 until March 31, 2018. Pay Attention because this is crucial. If you filed for unemployment three weeks ago, on June 30th, your BASE YEAR would be all of 2017. A few days can make a big difference.

3. Unemployment is intended for people who are LAID OFF. If you are not laid off because of âoelack of work,â the onus is on the person performing the action. If you are FIRED, the onus is on the employer to prove you were fired for good cause. If you QUIT, the onus is upon you to prove you quit for good cause. âoeGood causeâ is not just because you think it is, but it can be for things you might not think. For example, if you âoefollow spouse out of areaâ because he or she got a better job or one is in the military, both which require a move, that counts as âoegood cause.â If you just stop working because you donâ(TM)t like your boss or donâ(TM)t like the hours, thatâ(TM)s not âoegood cause.â This is a bit of a murky area and you can appeal any decision. But so can an employer.

So for a court to just say âoeUber employees get unemploymentâ is not âoegood lawâ at all. In fact, it shows ignorance of how unemployment works and ignorance on how Uber works. They typically do not âoelay offâ people; people just decide to not take any hours. Uber has NOT been paying a percentage into the unemployment fund, so the infrastructure does not exist and since Uber is not a âoereimbursable employer.â i.e.: a government entity like a library or city, they fall into a category that basically does not exist. And you can bet if Uber has any balls, they will fight this. In any case, itâ(TM)s not quite as easy as it looks.

Yep

[rsilvergun]

We spare no expense worrying about somebody occasionally getting some thing they didn't earn. As a result we make all our lives much, much worse. Those unemployed denied benefits are now gunning for your job and your boss knows it.

In 2008 the money lost was entirely paper and entirely paid for by the tax payer yet we all took pay cuts and worked longer hours. Our companies got away with that because they knew they could use the crash as an excuse to lay folks off and work the survivors harder, and if the survivors didn't like it they could become part of the problem and be unemployed.

One more point worth making

[rsilvergun]

there was more money lost to wage theft (e.g. when an employer doesn't pay wages earned, for example by forcing hourly workers into unpaid overtime or just plain shorting checks) than all burglaries combined.

Another good point: Texas spent $1.2 billion sending the national guard to police borders. They stopped 10,000 illegal immigrants. That's $120k per illegal immigrant. Those guys would have taken jobs paying $30k/yr tops (probably much less). We could have given $60k to every person put out of work by them and still come out ahead.

There's a line from Fred Pohl's The Space Merchant's that's appropriate here: Better to punish a 1000 innocent men than let one guilty one go free. No, that's not typo, go read the book.

Re:One more point worth making

[Maxo-Texas]

They really didn't "stop" the illegal immigrants so much as "delay" them until later.

Re: One more point worth making

[Bing Tsher E]

The 1.2 billion they spent went to wages for Texas citizens and for resources purchased from Texas companies. It wasn't money poured down a hole like when illegal aliens send the bulk of their wages back to their home country.

Re:One more point worth making

[Anonymous Coward]

Another good point: Texas spent $1.2 billion sending the national guard to police borders. They stopped 10,000 illegal immigrants. That's $120k per illegal immigrant.

Wrong. By this logic, you could divide the numbers of burglar convicted each year with the entire police budget and conclude that letting those burglars just take what they wanted would be cheaper. That's completely ignoring the simple fact that if there is no risk of getting caught, there would be MANY MORE burglars.

If that $1.2B wasn't spent, then there would be 1,000,000, if not 10 million, illegal immigrants, so it is more like less than $1k per illegal immigrant.

Re:One more point worth making

[Anonymous Coward]

Another good point: Texas spent $1.2 billion sending the national guard to police borders. They stopped 10,000 illegal immigrants. That's $120k per illegal immigrant. Those guys would have taken jobs paying $30k/yr tops (probably much less). We could have given $60k to every person put out of work by them and still come out ahead.

Which,of course, all this makes perfect sense when you realize the real goal is for the people in the system to profit by exploiting those outside the system, in other words, the current system exists to perpetuate the privilege that the upper class enjoys, it's the way power works. Indeed, no matter what people name it, or believe that it doesn't exist, the truth is this is system is one of economic slavery.

Okay with it.

[BeerMilkshake]

Fare is fare, after all.

I don't want to "work" for Uber/Lyft.

[Anonymous Coward]

I don't want to be their official employee. I don't even want this to be a business for me. I want Uber/Lyft/etc to simply be a matchmaking service for sharing my car, that takes a little bit for providing the matchmaking infrastructure. I want to be able to use whatever car I want. I want to be able to decline any requests sharing my car for whatever reason. I want to be able to not be deactivated because I haven't shared my car in over 4 months. That's what I want.

Platform vs Employer

[spinitch]

Straddling the fine line of employer vs platform. If just a platform then drivers should set rates and Uber collects commissions but since Uber exerts control beyond basic quality / safety control to attempt to over power the market through subsidies from their vast capital, Uber draws such scrutiny. Other business operating in similar manner have to pay, so should Uber. I like ride hailing services since broaden transportation options as well as other social income generation but there should be level competition rules.

You liked the convenience

[Anonymous Coward]

Uber must become as abusive as taxi drivers if the drivers become employees. They won't get to pick their hours. They will get fired for not working surge hours. Prices will double to triple with no benefit to anyone but the lawyers.

And of course...

[Anonymous Coward]

Now NY can collect unemployment insurance payments (taxes) from Uber. Never overlook the obvious motivation.

Re:And of course...

[_Sharp'r_]

And if a driver is working for multiple ride share companies (which most do), they can collect the taxes from more than one for the same "employee". I'm sure they haven't missed that angle, either.

Re:And of course...

[Anonymous Coward]

No different then from a worker who works two regular jobs to make ends meet.

You're deliberately mischaracterizing it

[rsilvergun]

a. Unemployment is not a tax on workers, it's a tax on employers. You can argue that employers will pass the cost on, but that's not exactly true since employers still have to compete for workers meaning there are other factors at play in determining how low they can set wages. It's the same false argument that says wages should never go up since workers will pay more for goods. It ignores how the economy works and how progress increases productivity and all the other impacts on an employees ages.

And one more thing, unemployment is NOT intended for the Laid off. It's intended for those still working. Specifically, it's meant to prevent a downward spiral on wages when desperate workers enter the workforce following minor economic booms. The rules have been changed over the years as part of a larger trend to disenfranchise workers and lower wages so that it's harder and harder to get unemployment, resulting in lower wages for everyone (including you).

Re:You're deliberately mischaracterizing it

[_Sharp'r_]

It's a tax on workers, just like SS/Medicare, health insurance requirements, HR paperwork regulations, etc... Almost the entire burden of the taxes, including the supposed "employer's share" are passed on the employees in the form of lower wages.

From the Tax Foundation:

"It turns out that the supply of labor – that is, workers’ willingness to work – is much less sensitive to taxes than the demand for labor – or employers’ willingness to hire. This is because workers who need a job are not as responsive to changes in wages, but businesses are able to “shop around” for the best workers or shift production to different locations."

This view is backed up by the academic papers on the subject. See The Incidence of Payroll Taxation: Evidence from Chile ("I find strong evidence that the incidence of payroll taxation was fully on wages, with no effect on employment") and The Incidence of Mandated Employer-Provided Insurance: Lessons from Workers' Compensation Insurance ("Empirical analysis of two data sets suggests that changes in employers' costs of workers' compensation insurance are largely shifted to employees in the form of lower wages.") and The Labor Market Effects of Rising Health Insurance Premiums ("Thus, rising health insurance premiums may both increase the ranks of the unemployed and place an increasing burden on workers through decreased wages for workers with employer health insurance and decreased hours for workers moved from full time jobs with benefits to part time jobs without. ")

The amazing part of unemployment is how quickly people whose unemployment ends find a job, when they couldn't possibly find one the whole time they were getting paid...

Citing a right wing think tank

[rsilvergun]

does not make your right. These are the same guys who got behind Trumps $1 trillion dollar give away to mega corps that's currently backfiring on workers (the Fed is going to raise interest and allow massive inflation to counter balance the over-reving to the economy that giving away $1 trillion to the top 1% did, meaning you're gonna pay more for everything you buy).

Look, you've been had. You're being manipulated (assuming you're not one of those Russian Trolls I keep reading about). Supply side economics, aka Trickle Down, doesn't work. The rich just keep the money and human civilization grinds to a halt as an increasingly small number of people take everything for themselves. Eventually they'll get around to taking what little you have....

As for the current issue, again, you're ignoring the two principle factors that until recently drove up wages and standards of living: productivity increases and worker solidarity. Wages are supposed to go UP when productivity goes up. This means workers are getting their share. That stopped happening in the 70s when the rich went after Unions (the cold war scare ending and allowing factories to be shipped overseas didn't help. FYI Marx predicted that but all anybody talks about him is that a few dictators borrowed his books for rhetoric).

Economist have finally been forced to start talking about why wages are declining and pointing out that it's because workers stopped unionizing (they put it in gentler terms, saying something about labor balance or some such). This trend will continue until we either descend into dystopia or start working together against the upper class again. You can either join guys like me in making a better world or hope you get to be one of the 1%ers bootlickers. But you're not one of them, and you never will be. Remember that.

Re:Citing a right wing think tank

[_Sharp'r_]

The Tax Foundation article just did a good job of explaining the economics of it and came up at the top of a Google search for payroll tax incidence. What you'd need to attempt to refute are the multiple academic studies cited (and there are plenty more), preferably with some actual evidence, not an ad hominem attack on the people doing the explaining.

Please don't try to patronize me by telling me I've been manipulated or are a troll. I've spent 20+ years studying economics, you're going to need actual empirical and theoretical evidence to try and convince me I'm wrong, because that's what my opinions in the field are based on.

For example, you're discussion of productivity increase actually argues against your position, because the primary reason economists have found for the worker share not going up recently in the U.S. are health insurance regulatory cost increases. Workers are getting paid more in total compensation over time, but they end up not getting it as cash because it goes to their health insurance costs instead. (See previously cited related paper above).

So please, feel free to try again, but this time with evidence.

Quit & get benefits?

[gordguide]

" ... Uber drivers who had quit over low pay ..."

I realize that laws regarding pay differ in the US, but in Canada, if you quit your job, you are automatically deemed ineligible for EI (Employment Insurance) and your claim will be rejected.

You can still get benefits if you meet certain criteria (were harassed at work and can prove it, for example) but the bar is pretty high. You will have a long (many months) fight on your hands with no guarantee you will be successful, and you will be without income unless you find new work (at which point you would be ineligible for benefits in any case).