The status of Uber drivers is shaking up definitions of employees versus contractors. If you haven’t hired a driver from Uber (or their biggest American competitor Lyft), you are likely older, more suburban, or possibly less “hip” than their regular customers.
In case you are not in the know, Uber is officially a ride sharing service, available in 300 cities worldwide. Uber drivers’ availability is signaled through the Uber app, which connects ride seekers with these ride offerers. Money changes hands exclusively through the app. Following the ride, the driver and passenger rate one another. These ratings determine future business and future rides.
It is relatively simple to find a driver, to know exactly when to expect them and to know what your fare will cost.
Uber drivers are part of a somewhat underground “gig economy”, using their Uber affiliation to work part-time, during the times that are convenient for them.
Uber’s popularity and convenience is skyrocketing and it is rankling the rank and file taxi owners, not just in the United States, but in Paris, where cab drivers set tires aflame on Paris streets to protest the intrusion of the Uber drivers in the taxicab commerce. The French cab drivers, who like other taxi drivers and owners, pay for the privilege of being an official taxi driver, believe that the Uber drivers are cutting into their business, which they are. The French public, on the other hand, appreciates the cheaper Uber rates, the drivers’ more polite disposition and their transparency in terms of availability and price.
Taxi drivers aside, Uber has also caught the eye of the California Labor Commissioner, who ruled against Uber and in favor of a former driver, Barbara Ann Berwick. The Labor Commissioner maintains that Berwick was an employee and not an independent contractor, as Uber maintains and that Berwick is owed over $4,000 in mileage costs as well as tolls. Uber is appealing the ruling.
The definition of an Uber driver is critically important as the company moves forward.
If the drivers are indeed employees, then Uber is responsible for paying Social Security as well as other benefits, and certain driver expenses as well. Uber maintains that the drivers own their own vehicles, choose their own hours, are free to work for competing ride sharing businesses and are therefore contractors. The Labor Commissioner maintained that Uber vets and screens the drivers, gets rid of them if they have poor ratings and receives the funds from the passengers for the rides, then pays a non-negotiable service fee to the driver.
The field of employment law is getting murkier with the addition of multiple models of paying for services. This gig economy may result in changes in defining employee status or changes in employment regulation.The California ruling does not affect the Uber model in other states, unless lawsuits against Uber find traction in other venues, too.