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Thread: California Says Uber Driver Is Employee, Not a Contractor

  1. #1

    California Says Uber Driver Is Employee, Not a Contractor

    http://www.nytimes.com/2015/06/18/bu...pgtype=article





    Technology

    California Says Uber Driver Is Employee, Not a Contractor

    By MIKE ISAAC and NATASHA SINGERJUNE 17, 2015


    Photo

    Uber drivers protested working conditions in Santa Monica, Calif., last year. Credit Lucy Nicholson/Reuters


    In what could prove to be a ruling with serious implications for some of Silicon Valley’s fastest-growing technology companies and the work they are creating, the California Labor Commission said that a driver for the ride-hailing service Uber should be classified as an employee, not an independent contractor.


    The ruling ordered Uber to reimburse Barbara Ann Berwick, a former Uber driver, $4,152.20
    in expenses and other costs for the eight-week period or so that she worked as a driver for the service last year.


    While Uber has long positioned itself as merely an app that connects drivers and passengers — with no control over the hours its drivers work — the Labor Commission cited many instances in which it said Uber acted more like an employer.

    The ruling re-ignited a long-simmering debate over whether the work being created by online services and apps like Uber, Lyft and Instacart are the right kinds of work opportunities for both the economy and for workers, and could influence other legal actions over the classification of such workers. The technology companies have contended that their virtual marketplaces, in which people act as independent contractors and use their own possessions to provide services to the public at the touch of a smartphone button, afford workers flexibility and freedom.
    Yet labor activists and others have said such roles — with people working as freelancers and having little certainty over their wages and job status — are simply a way for companies like Uber to minimize costs, even as they maintain considerable control over drivers’ workplace behavior. They say that such control is typically the hallmark of an employee relationship, which should bring with it benefits, more stable pay and greater job security.
    The classification of freelancers is in dispute across a number of industries, including at other transportation companies. And the debate is set to escalate as the number of online companies like Uber, Airbnb and others rises. Venture capitalists have poured more than $9.4 billion into such start-ups — known as on-demand companies — since 2010, according to data from CB Insights, a venture capital analysis firm, spawning everything from on-demand laundry services to on-demand hair primpers.

    “For anybody who has to pay the bills and has a family, having no labor protections and no job security is at best a mixed blessing,” said Robert Reich, former secretary of labor and a professor of public policy at the University of California, Berkeley. “At worst, it is a nightmare. Obviously some workers prefer to be independent contractors — but mostly they take these jobs because they cannot find better ones.”

    The California Labor Commission’s ruling, which was made June 3 and came to light after Uber filed an appeal Tuesday evening, noted that the company provided drivers with phones and had a policy of deactivating its app if drivers were inactive for 180 days.

    “Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the Labor Commisson wrote about Uber. “The reality, however, is that defendants are involved in every aspect of the operation.” The Labor Commission did not respond to requests for comment.

    The ruling does not apply beyond Ms. Berwick and may be altered if Uber’s appeal is successful. In a statement, Uber said the decision was “nonbinding and applies to a single driver.” The company said individual cases about worker classification in at least five other states, including Georgia, Pennsylvania and Texas, have resulted in rulings that categorize drivers as independent contractors.

    Politicians, lawyers and others quickly seized upon the California Labor Commission’s ruling as one that could have major repercussions among some of the fastest-growing Silicon Valley start-ups, of which Uber is the most prominent.

    “Today’s ruling from the California labor regulators demonstrates why federal policy makers need to re-examine the 20th-century definitions and employment classification we’re attempting to apply to a 21st-century work force,” said Senator Mark R. Warner, a Democrat from Virginia. “As many as one-third of American workers are participating in some aspect of the contingent work force, and we have a responsibility to provide clarity and predictability instead of allowing inconsistency and confusion as these issues are litigated on a case-by-case and state-by-state basis.”
    Uber faces other legal actions over the status of its workers, including class-action lawsuits from drivers saying they were misclassified as independent contractors. Shannon Liss-Riordan, a Boston-based employee and labor rights lawyer who is involved in the class-action lawsuits on behalf of drivers against Uber, said the Labor Commission’s ruling would be “helpful” to the suits.

    “This is a very big deal,” she said. “Uber has been fighting very hard against any decisions like this coming out, and when a fact-finder sat down and looked at the situation, they determined that Uber is an employer.”
    Other Uber drivers may also be inspired to follow Ms. Berwick’s example, given that filing for costs and expenses through the California Labor Commission is a relatively simple process.

    “We’ll see if this starts a trend,” said Wilma B. Liebman, the former chairwoman of the National Labor Relations Board. “I wouldn’t be surprised if there’s a flood of similar kinds of claims.”

    Confusion over the status of such workers is set to continue, said Paul Secunda, professor of labor law at Marquette University Law School. “We’re going to see a lot more cases” about workers for Uber, Lyft and others, who are known in legal parlance as 1099 workers, he said. “Competitors like Lyft will also be challenged, to the extent they use independent contractors. Eventually, we’ll emerge in a couple of years, with an answer.”

    Uber, co-founded five years ago by Travis Kalanick, who is chief executive, has come to symbolize the worker debate by virtue of its girth. The company, based in San Francisco, has rapidly disrupted entrenched taxi and transportation industries with its model of letting people hail rides from their smartphones. Uber, which has collected billions of dollars in venture capital and is in talks to raise more money at a $50 billion valuation, is now operating in more than 300 cities across six continents.

    To meet consumer demand, Uber’s driver ranks have swelled globally. At a presentation this month celebrating Uber’s five-year anniversary, Mr. Kalanick said the company had 26,000 drivers in New York City alone, 15,000 in London, 22,000 in San Francisco, 10,000 in Paris and 20,000 in Chengdu, China.

    “Every single month, Uber is adding hundreds of thousands of drivers around the world,” Mr. Kalanick said at the presentation.

    Uberhas often run into regulatory hurdles worldwide. In China, local authorities have raided Uber offices in two cities over questions about whether its service is legal because drivers are not licensed. In the United States, cities including Portland, Ore., have claimed that Uber operated an “illegal, unregulated transportation service.” It has also faced protests from cabdrivers.

    Ms. Berwick, an entrepreneur who lives in San Francisco, may seem like an unlikely David to the Uber’s Goliath. In the 1980s, she said, she founded Berwick Enterprises, an adult phone entertainment company that is now an independent money manager, for which she said she did online trading as a volunteer.

    In a phone interview, Ms. Berwick said that she started driving for Uber last summer because she had grown bored working by herself at her computer. But she quickly took issue with Uber’s policy of classifying the drivers who ferry its ride-hailing app passengers as independent contractors.

    “People who drive people are employees,”


    Ms. Berwick said. “Bus drivers are employees. Paratransit drivers are employees.”


    In the course of driving for Uber between July and September 2014, working 60 to 80 hours a week, she said, she earned about $11,000 before expenses and taxes.


    “If you work it out, if I didn’t get compensated for expenses, I’d be working for less than minimum wage,” Ms. Berwick said. So she said she decided to file a claim against Uber last September with the California Labor Commission for overtime, expenses and interest, setting in motion the events that led to the ruling.


    .gov $#@!s everything free and honest up again
    Last edited by presence; 06-17-2015 at 06:17 PM.

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

    Awareness is the Root of Liberation Revolution is Action upon Revelation

    'Resistance and Disobedience in Economic Activity is the Most Moral Human Action Possible' - SEK3

    Flectere si nequeo superos, Acheronta movebo.

    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...




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  3. #2
    Wow, it might be the end of this great company ;-) I was always curious how did they manage to avoid employer-employee relationship with all the people they were, for lack of a better word, using around the world.
    Last edited by timosman; 06-17-2015 at 06:36 PM.

  4. #3
    “People who drive people are employees,” Ms. Berwick said. “Bus drivers are employees. Paratransit drivers are employees.”
    Most taxi drivers, on the other hand, are not. They are contractors. The company does not pay them. They pay the company. They are free to work as many hours as they wish. If they only make enough money to pay the company, they don't make minimum wage. They don't make anything at all.
    Quote Originally Posted by Swordsmyth View Post
    Ron is wrong...
    Quote Originally Posted by Swordsmyth View Post
    Amash is wrong...

  5. #4
    Quote Originally Posted by acptulsa View Post
    Most taxi drivers, on the other hand, are not. They are contractors. The company does not pay them. They pay the company. They are free to work as many hours as they wish. If they only make enough money to pay the company, they don't make minimum wage. They don't make anything at all.
    This problem of drivers not making the minimum wage will be solved relatively soon http://www.forbes.com/sites/anthonyk...below-the-api/
    Last edited by timosman; 06-17-2015 at 08:46 PM.

  6. #5
    Assuming this isn't astroturf, these people are going to be wondering what happened to their income when Uber decides just to leave California all together
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  7. #6
    This is why we can't have nice things.

  8. #7
    Is this ruling truly bad for Uber?

    Is Uber going to turn crony corporatist?
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
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    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  9. #8
    Eventually the next generation of this software is going to take uber out of the picture. It will be peer to peer local mesh networks and blockchain contracts. They'll be no centralized data hub.

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

    Awareness is the Root of Liberation Revolution is Action upon Revelation

    'Resistance and Disobedience in Economic Activity is the Most Moral Human Action Possible' - SEK3

    Flectere si nequeo superos, Acheronta movebo.

    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...




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  11. #9
    Commie fornia needs more FRN'S . How would you like to gift them ?

  12. #10
    Quote Originally Posted by presence View Post
    Eventually the next generation of this software is going to take uber out of the picture. It will be peer to peer local mesh networks and blockchain contracts. They'll be no centralized data hub.
    "You can't stop the signal, Mal."

  13. #11
    Is Uber different in the PRC than in other states?

  14. #12
    Quote Originally Posted by Occam's Banana View Post
    This is why we can't have nice things.
    Until we just start doing "things" anyway.

    $#@! them and their illegitimate authority.
    "One thing my years in Washington taught me is that most politicians are followers, not leaders. Therefore we should not waste time and resources trying to educate politicians. Politicians will not support individual liberty and limited government unless and until they are forced to do so by the people," says Ron Paul."

  15. #13
    "Everything government touches turns to crap." -- Ringo Starr

  16. #14
    This is really disappointing. Uber should operate however they want. They are very successful and most drivers are very happy working for them. If you're not happy working for Uber, find another job. But Uber is great because you can work as many hours as you want, it's very flexible.

    The demand for the service is very peaky, it tends to be a lot busier on the weekends at night in particular - there is decent demand in bigger cities during the day, but only so much. So it works very well for people who want a second job where they can go out and work for a few hours and make a lot of money when there is peak demand.

    The Uber drivers who think they are being treated unfairly are trying to turn it into a full time position, and the wages they earn may be lumpy due to low demand during all the hours they want to work. The thing is, they only need so many full time drivers - they need more part time drivers who only want to work a few hours on the weekend. What they need to do is get another job during the week and do Uber part time, that is what the ridesharing demands are.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."

  17. #15
    Quote Originally Posted by dannno View Post
    What they need to do is get another job during the week and do Uber part time, that is what the ridesharing demands are.
    Yup, they should be working on mechanical turk - https://www.mturk.com/mturk/ - for the rest of their time. /sarc

  18. #16
    Thinking about it more, this may be worse than I thought. Uber is really smart and they may think of a way around it, but I don't like where this is going.

    The idea behind Uber is that the demand for rides drives the supply of drivers. If people need rides, drivers will login and give them, but there is no point in being logged in if nobody wants rides so this helps curtail the supply of drivers when it isn't busy.

    Conversely, when the demand swings up drivers can make money giving rides - if the demand is higher than what is being supplied surge rates kick in and this encourages drivers to be out on the roads when the demand is really high.

    If Uber has to pay people a bunch of benefits just because they are online for a certain amount of hours, basically anybody who becomes an Uber driver can just go online even if there isn't demand for rides and they will not have to do much work or give a lot of rides and they will still receive the benefits. So they won't really even be paying for their benefits to a very large extent. This money will have to come from the profits of drivers who drive during busy times. Uber will ultimately have to take a higher percentage of drivers fares to pay for these benefits.
    "He's talkin' to his gut like it's a person!!" -me
    "dumpster diving isn't professional." - angelatc


    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

    "Paul said "the wave of the future" is a coalition of anti-authoritarian progressive Democrats and libertarian Republicans in Congress opposed to domestic surveillance, opposed to starting new wars and in favor of ending the so-called War on Drugs."



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  20. #17
    Quote Originally Posted by dannno View Post
    Thinking about it more, this may be worse than I thought. Uber is really smart and they may think of a way around it, but I don't like where this is going.

    The idea behind Uber is that the demand for rides drives the supply of drivers. If people need rides, drivers will login and give them, but there is no point in being logged in if nobody wants rides so this helps curtail the supply of drivers when it isn't busy.

    Conversely, when the demand swings up drivers can make money giving rides - if the demand is higher than what is being supplied surge rates kick in and this encourages drivers to be out on the roads when the demand is really high.
    Wait a second here... are you trying to say that a free market actually works?
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  21. #18

    Uber Challenges Class Action Lawsuit in New Motion

    http://time.com/3951354/uber-class-action-suit-motion/

    The company's lawyers argue that the 160,000 Uber drivers in California have "little or nothing in common"
    Uber filed a motion in a California court Thursday opposing a class action lawsuit against the company, marking the latest salvo in the increasingly pitched battle over how workers are treated in the multi-billion dollar on-demand economy.

    The lawsuit filed in California’s Northern District Court alleges that Uber drivers in California should be classified as employees rather than independent contractors. Uber challenged the certification of the class in its motion, arguing that the more than 160,000 Uber drivers in the state have “little or nothing in common,” aside from having downloaded and used the Uber app “at some point over the past six years.”
    That ruling determined the status of only one driver, and Uber has appealed it. If the district court lawsuit is certified as a class action, it has the potential to affect far more workers. A hearing is scheduled for August.



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