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Limo Firm To Judge: Tell Us Whether Uber Drivers Are Employees (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: Lawyers representing a Southern California limousine company that sued Uber last month over state unfair competition allegations have now filed a motion for partial summary judgement. If the filing is granted by the judge, the motion would substantially streamline the case and answer the vexing question: are Uber drivers employees or not? The proposed class-action lawsuit, known as Diva Limousine v. Uber, relies on a recently decided California Supreme Court decision that makes it more difficult for companies to unilaterally declare their workers as contractors, which effectively deprives them of benefits that they would otherwise receive as employees.
In the California Supreme Court case, known as Dynamex, that court came up with a three-part test, known as the ABC test, to figure out whether companies can assert contractor status or not: "(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, (B) that the worker performs work that is outside the usual course of the hiring entity's business, and (C) that the worker is customarily engaged in an independently established trade, occupation, or business, the worker should be considered an employee and the hiring business an employer under the suffer or permit to work standard in wage orders." "The standard for summary judgement is that there is no triable issue of material facts. That seems to be the case here," says Professor Veena Dubal of the University of California, Hastings, which is just blocks from Uber's headquarters in San Francisco.
"Under Dynamex, workers are likely employees for purposes of minimum wage and overtime if they perform work that is within the usual course of the hiring entity's business. Uber drivers provide rides, and Uber is a transportation company that facilitates the provision of those rides. I have a hard time imagining how Uber can argue that there is a triable issue of fact here, although I am confident that they will argue that they are a software company. They have lost that argument in courts across the world."
In the California Supreme Court case, known as Dynamex, that court came up with a three-part test, known as the ABC test, to figure out whether companies can assert contractor status or not: "(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, (B) that the worker performs work that is outside the usual course of the hiring entity's business, and (C) that the worker is customarily engaged in an independently established trade, occupation, or business, the worker should be considered an employee and the hiring business an employer under the suffer or permit to work standard in wage orders." "The standard for summary judgement is that there is no triable issue of material facts. That seems to be the case here," says Professor Veena Dubal of the University of California, Hastings, which is just blocks from Uber's headquarters in San Francisco.
"Under Dynamex, workers are likely employees for purposes of minimum wage and overtime if they perform work that is within the usual course of the hiring entity's business. Uber drivers provide rides, and Uber is a transportation company that facilitates the provision of those rides. I have a hard time imagining how Uber can argue that there is a triable issue of fact here, although I am confident that they will argue that they are a software company. They have lost that argument in courts across the world."
You can choose, If they're employees, you're liable if they kill 20 people in a horrific accident. If they're not employees, you're off the hook. What's your choice?
Try asking half the "contractors" in IT whether they have to show up at work at 9am or not. Most of them will quite obviously begin to cycle through the stages of grief when you point this out.
Of course Uber drivers are employees
The driver's fares are set by Uber
Driver's have to abide by Uber's code of conduct
Uber terminates drivers who break the code of conduct
Uber sets a minimum rating that the driver must maintain
Uber provides the clients (riders) for the driver
The driver must pick up any rider assigned to them
The driver must drive the route the Uber app plots
Uber sends recommendations for improvement to the driver
Doesn't sound like a freelancer to me.
"The standard for summary judgement is that there is no triable issue of material facts. That seems to be the case here," Wrong! That's only half - if, in the Judges mind there are only matters of law, the judge can rule for or against the plaintiff or the defendant without a trial. That's actually what will happen here.
nothing to see here - move along
So by this logic, everybody bidding on contracts on freelancer.com is now an employee of freelancer.com and entitled to minimum wage for the duration of their membership? This fundamentally fails the employment test of mutuality of obligation because an Uber driver is under no obligation to accept any available drive.
And the entire 'sharing economy' is a sham devised to squueze the maximum profit possible out of crowd sourcing. This is how *we* raised millennials, and yet oddly the average Uber driver is over 30. Good job, parents. :/
What about taking on additional clients? I doubt many IT contractors do that. Or maybe they're fearful to do that, or else it will piss off the company they are contracted out to.
Well, it has been almost a week since we last rehashed this topic, so let's do a review. There is no ONE criterium that makes someone a contractor or employee. The IRS has a 20 point checklist (listed below). Uber meets some of the criteria, and doesn't meet others. But it is a checklist, not a scorecard. So does that mean their drivers are employees? Answer: Maybe.
Also, it is not necessarily "better" to be an employee ... or a contractor. Employees tend to get more benefits in addition to their pay, but also tend to be paid less and have less flexibility.
1. Must the individual take instructions from your management staff regarding when, where, and how work is to be done?
2. Does the individual receive training from your company?
3. Is the success or continuation of your business somewhat dependent on the type of service provided by the individual?
4. Must the individual personally perform the contracted services?
5. Have you hired, supervised, or paid individuals to assist the worker in completing the project stated in the contract?
6. Is there a continuing relationship between your company and the individual?
7. Must the individual work set hours?
8. Is the individual required to work full time at your company?
9. Is the work performed on company premises?
10. Is the individual required to follow a set sequence or routine in the performance of his work?
11. Must the individual give you reports regarding his/her work?
12. Is the individual paid by the hour, week, or month?
13. Do you reimburse the individual for business/travel expenses?
14. Do you supply the individual with needed tools or materials?
15. Have you made a significant investment in facilities used by the individual to perform services?
16. Is the individual free from suffering a loss or realizing a profit based on his work?
17. Does the individual only perform services for your company?
18. Does the individual limit the availability of his services to the general public?
19. Do you have the right to discharge the individual?
20. May the individual terminate his services at any time?
Both Uber and Lyft skirt cab and limo regulation by calling themselves ride share technology companies. Also claiming drivers are neither employee's or contractors because Uber and Lyft simply use technology to connect the rider with the ride share person. Unfortunately because they also bill the rider direct the become a representative of the driver but only because they provide the leads, and billing services.
However, This arrangement is being challenged more and more by cities and governments.
Why does anyone on slashdot defend Uber? Sure, they spearheaded a business model, but they've gradually boiled us all into believing exploitation is ok. They started out as a great opportunity for anyone with a vehicle and some spare time. Now they're just a taxi company that takes no financial risk themselves, offloading it on their employees.
I was split on my opinion until a driver explained to me:
1) if he completes a drive in less time than anticipated, Uber pays him LESS. This is a classic behavior of employers.
2) Uber might send him ANYWHERE. He has no control where his next pickup will take him, so he can't plan his after-shift free time. If he ends up in the middle of nowhere, having dropped off his passenger ahead of time, he might make less than 1/2 of what he would normally make, because Uber does't pay you for the time you worked, but the time they made money off you.
They've taken the worst parts of being an employee and a contractor and combined them into one thing. Fuck that.
Why do Americans keep falling for shit like this? "As long as it's not ME who's being hurt in this SPECIFIC case, well okey dokie boss." Then they wonder why they're scraping by. Even (especially)tech employees in Silicon Valley can't afford their homes and to save for retirement, but these bull shit boot lickers continue.
Uber, in short, is a dating service (between drivers and riders).
Where are we going and why are we in a handbasket?
and the best part is you've got an 18 month shelf life because that's as far as they can employ you as a "contractor" before somebody notices they're dodging taxes.
What I don't get is all the folks who don't want to do anything about it. If you're rich, yeah, I get that. You want to go on abusing people. But I know so many folks who won't touch the system because they're convinced that if they do the government'll go all Stalin on them. Seriously, first we have adequate worker protections and next thing you know it's gulags. I wish I was exagerating. They get it from talk radio. There's a documentary of a woman and her dad where her dad went crazy anti-gov't after getting stuck on a long commute and listening to talk radio for a year....
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One thing that vexes me a bit about the ruling: if Uber were bought out (by, let's say, Microsoft), would that change the legal argument at all?
It disturbs me that it might. Clearly if Uber were purchased by Microsoft, the drivers would no longer be a core part of the company's business. But they would still be central to a particular product which they would provide. Here's hoping future court decisions fix this loophole, a loophole which may drive more mergers without actually protecting workers.
Since this is a California labor law case, and labor law outside of civil rights and unionization issues still remains a matter of state law, that checklist means very little.
Instead, to prove that an employee is an independent contractor, an employer must show:
(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(B) that the worker performs work that is outside the usual course of the hiring entity's business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Otherwise known as the ABC Test. Does that mean that the drivers are employees? I'd take that bet.
This is in California. While helpful, IRS tax laws are not directly related.
Try asking half the "contractors" in IT whether they have to show up at work at 9am or not. Most of them will quite obviously begin to cycle through the stages of grief when you point this out.
I used to be a contract worker before I got full time at a fortune 500. (They got rid of the contract workers, so you had to try for full time.) The only real differences were this:
1. Contract pay was better.
2. No sick time or vacation pay, but you didn't care. See (1). You could pretty much take off when you needed to with some reasonable notice and making sure you were caught up.
3. No performance reviews.
I find the current republican party to have almost no redeeming values, and their head to be clear net negative to humanities balance sheet. That being said, on the question of employee vs not, my answer is we need to make it irrelevant.
Seriously, why should it be a good thing that it matters? Someone driving a car to move people should have the same requirements, whether they work for a big company or out of their garage.
Equally they should basically have the same benefits available. Improve the affordable care act. Buying health care there should be basically the same as getting it through your employer. Similarly for a 401k or such. Why do you need a big company to provide benefits? (A case can be made for sick/vacation time just so people use it, but that's pretty much it.)
We need to get rid of all this nonsense. Yes, people need to pay for health insurance and such. That is fine, but it should not be linked to your employer. Give _people_ back their power. Let moving between jobs be a trivial process.
Given that most Uber drivers drive for Lyft as well, does that mean that they've gone from contractors to double-dipping benefits from two employers?
FYI, the singular of "criteria" is "criterion". Cheers.
For the same reason so many shit all over the idea of unions: because they're elitist snowflakes who think they're in the top .01% of workers, are compensated accordingly, and any gubbmit interference or union would get in the way of that.
That they are serfs kissing the asses of their feudal lords for a pat on the head never occurs to them.
A: no contractor is free from the control and direction of the contracting entity, the whole point is that as a contractor you are bound by the terms of the contract. on the other hand uber drivers have a high degree of flexibility as to when, where and for how many hours they work, a benefit most employees will not have.
B: many uber drivers also operate independently of uber and are free to do so, where uber has competitors a lot of drivers are signed up to the competing services as well, plus many also take bookings through local private hire companies, or even random customers hailing taxis on the street. All this depends on local legislation as to what jobs a driver can take.
C: as b, depending on local laws
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The reason you have the system of medallions in NYC, for example, is to ensure a certain amount of order.
The cab drivers can make a living, the cab companies harbor the liability and ensure safe drivers, you don't spam the streets with tons of cars, and supply is in balance with demand. If you end up with a downturn, drivers are laid off instead of everyone's pay dropping to unsustainable levels and the system collapsing. Any Schmuck with a drivers license can drive people around, and we've come to a realization at some point in the past that's a responsability that we need to regulate because times got bad and the affair of public transport got sketchy as heck.
The ridiculous price of Medallions in NYC is, however, a sign of a collapsing government. On what precisely are they spending the revenue of upwards of a million bucks a medallion on? I'd like to see the impact cost of 1 cab on the city. And the thing is with fewer cabs, you have less tax revenue because fewer people are moving around. Governments usually resort to robbing the public prior to collapse and reformation. The US has been through that a few times.
Uber is a social experiment that is responding to that collapse. Both economically, a collapse of public faith in government, and a collapse of the support for the law.
Are their drivers employee's? By the letter of the law and common decency, there is no question that they are. Their entire business model flys in the face of government regulation. You'd think an easy way to fix the issue is to arrest and fine the drivers themselves; When the executive management is caught intentionally not giving rides to regulators and police to avoid being prosecuted. But the people have no faith in government, which is why they support Uber and the judges deal with confoundment.
In all candor, I use Taxi's to avoid the social experiment. I'm not the adventurous type. But I believe very strongly that once people begin to view government as an investment, and thus trust their government again, Uber is toast and the company management is going to get hauled infront of a jury. What the jury decides is upto them.
Rather than try to determine by some complex set of criteria if they are employees, why not decide if she think they should be or not and then make any adjustments to the law that are necessary?
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If uber is providing the passenger some sort of insurance policy on behalf of the driver then the driver is not a contractor but an employee. Uber is providing the service to the passenger and uber is providing the tools of the trade-- insurance--- for the driver.
Some drink at the fountain of knowledge. Others just gargle.
Imagine you go to work at your job, say frying burgers at macdonalds.
Imagine a third party that owns the building rents the use the grill and charges you for ingredients.
Macdonalds pays you to be on-call to supply fried meat. And for 7.95 an hour plus expense you contract to provide as many burgers as you can make in that hour. Your expenses are meat and grill rental are paid to the facility owner.
Are you a contractor or an employee?
By the uber definition, you are supplying the tools of the trade (the fact that you lease them is irrelevant) and macdonalds is purchasing the product you make. They are not employing you. You are a contractor.
Some drink at the fountain of knowledge. Others just gargle.
"in connection with the performance of the work." You contract for results, not for how the work is done. If you want to control how the work is done, then you hire an employee.
"outside the usual course of the hiring entity's business." If you sell transportation services, and the worker performs transportation services for you, then they are an employee. It does not matter if the worker can also operate independently of you -- that's called "having a second job."
"an independently established trade, occupation, or business of the same nature as the work performed."
C: as b, since "having a second job" with Uber's competitor(s) is not "an independently established trade, occupation, or business," but rather working for a fraternal twin employer. Does the driver obtain their own clients, collect their own fees, etc? No? Then it's not an independently established business, now is it?
By the way, the time for arguing that "no contractor is free from the control and direction of the contracting entity" is past. That is the test. If you want to argue that it cannot be met, in addition to having the California Supreme Court tell you that it can, failure to meet the prong means that the worker is an employee. So have fun with that.
A. You don't understand the 'A' criteria. This means that the contractor is able to provide the objective output without control of the contracting entity. In simplistic (and admittedly ineffective) terminology, this means no micromanagement. If you're contracted to provide a widget, you turn in a widget in exchange for your fee. In this case, you get the person from point to point. Part of the question is where the objective turns into control. Is dictating the application the driver uses? The vehicle characteristics?
B. You don't understand the 'B' criteria. It isn't about whether the worker can contract with another contracting entity (for this or other work). It's about whether or not the work that the contractor is supplying is or is not part of the contracting entities regular business. If you're an agency that makes websites for customers, it's hard to argue your contract web developer is supplying something outside your regular business. When Uber has faced similar challenges, their position is that they are a software company providing software and that they are not in the business of providing transportation. This is dubious.
C. This is more in-line with your 'B' argument. This is the strongest argument Uber has that its drivers are contractors, with respect to the California 'ABC'. However, it's not pick-and-choose. It's all 3.
It's not that we support Uber.
We support the rights of people to decide what's good or bad for themselves without interference from the Big Brother or Taxi cartels.
We oppose the rent-seeking by the aforementioned corrupt Taxi cartels at the expense of us, the people.
So long as nobody is forced to associate with Uber as a rider or passenger, they (Uber) are the good guys here.
I don't respond to or upvote ACs
Full disclosure: I used to work for a Southern California limo company that occasionally contracted with Diva.
I think it's good that Diva is doing this as they're really sticking up for the whole industry (hence the class action including several companies). To be a chauffeur and to run a transportation company, there are laws, regulations, and yes bureaucracy involved. The company I worked for and any other non-fly-by-night company follows these laws and pays the fees and get all kinds of licenses and insurance. It's not fair that Uber can show up to the scene and ignore the laws and play dumb while competing with existing companies that follow the rules.
That being said, I don't think Uber really affected our business as the company I worked for was more high-end. We wouldn't pick up drunk people at a moment's notice or do school dances and such.
Uber drivers get their salary via Uber, so they are employed by Uber. The limo company uses the service provided by Uber, the Uber drivers. The limo company hasn't employed any Uber drivers, they are simply using Uber's service. Just my personal opinion.