10 ms·

Uber drivers, if employees, owed $730M more: U.S. court papers

94 points by wrongc0ntinent 10y ago

deleted 10y ago
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cylinder 10y ago
I really don't want to defend Uber, but how are Uber drivers employees, yet taxi drivers and livery drivers have always been independent contractors tied to a base or dispatchers for decades? There are a lot of labor abuses out there in America that I wish would get attention, including contractor classification, but I'm not sure this is one of them.
- mc32 10y ago
  Yeah that's one I don't quite understand either. From what I understand, if we put aside the ratings system, these platforms are easier to work with than traditional taxi services, where you were leasing vehicle and medallion from them. Here at least you can dip your toes if you like and stay or you can go as you wish. People talk about reimbursements for gas and mileage which they'd be owed if employed. But dont they know this to be the case beforehand and still accept the terms? I think people are seeing these valuations based on potential (platform, automation, etc.) and perceive it to be based on current services model and thus feel left out of the future windfall. In any case, drivers have an expiry date in the not too distant future, so grab what you van now.
  - smileysteve 10y ago
    I think that Uber and Lyft would go a far way if they offered an information session (or linked w/ a startup space) that explains how to expense things.
    - dnautics 10y ago
      they can't do that, it would break the law unless they were certified to give financial planning advice.
      - nrb 10y ago
        His point is that, if you are correct, they could easily work with someone who is certified to give this advice.
        dnautics 10y ago
        they can make referrals. And they do (lyft does anyway) but IANAL, but i think that's about the level of involvement they can do.
      - smileysteve 10y ago
        From 2 perspectives * Yes, they'd have to hire / refer / recommend a financial planner / accountant / or "not financial advice" * Any sort of non voluntary training could be construed as breaking the consulting relationship - but then again, franchises do this often as a b2b setup.
  - dragontamer 10y ago
    Here's a hypothetical system that actually uses independent contractors. Lets say Newber (a new disruptive Uber competitor) starts up to explicitly conform to the independent contractor regulations. Newber drivers set their own prices, which are then published on Newber's app (sorted by some formula accounting for location + costs). When a passenger looks for a driver, they see the list of prices available, and then call the one that has the best price. Newber collects a small fee for the successful listing. In contrast, Uber sets the prices on both ends. Without the independence to set your own prices, Uber is closer to an employee/employer relationship than the classical Taxi models.
    - astrange 10y ago
      Sidecar did that - I tried it once after the Uber driver complained I wasn't using Sidecar for 15 minutes. All the rides were too expensive, so I didn't take any of them. And now they're out of business.
      - r00fus 10y ago
        Which means, really, Uber should consider it's drivers as employees. It makes a hell of a lot more sense if they do, they are just liable for more.
    - wnoise 10y ago
      Well, classical taxi models generally don't set the prices either, as state or city regulations almost invariably do that.
    - prostoalex 10y ago
      Sidecar did exactly that and, for what it's worth, never got in trouble with regulators on employment issues. Some of the complaints I've heard about the practice were about the driver-enforced surge pricing - some drivers would price the ride at $9,999.99 on New Year's Eve, so you always felt like if you let your attention slip a bit (perhaps the process would be sped up by alcohol consumption), you'd be gouged.
  - marincounty 10y ago
    "Here at least you can dip your toes if you like and stay or you can go as you wish." I'm assuming you think Uber is a easy way to see if you can make money transporting poeople? 1) A lot of people are buying into Uber marking campaigns. They buying an Uber approved vechicle to test the waters. 2) These Four door Uber approved vechicles are expensive. It's different than leasing a cab for a few weekends. I've heard of people ruining their credit, and some even declaring bankruptcy when Uber dreams didn't work out. Buying the new black Prius is just a slap in the face? 3) http://driveubernyc.com/vehicles/full-list/ http://driveubernyc.com/vehicles/full-list/ It's this list that has me baffled on many levels. I love the marketing tool, at the top of this url. I guess because it's a contest they can dictate what independent drivers do? 50 hours a week 1.3 passengers/hr. Etc, etc.
- brianwawok 10y ago
  One could argue that many taxi drivers don't speak English as their first language, and thus are an easy to exploit group of workers. The same way we pay some migrant workers under minimum wage to pick crops from our fields, we abuse Taxi drivers? If a Taxi driver is given the car to drive, given set hours... seems like they are more an employee than an Uber employee picking his own hours and using his own car.
  - mc32 10y ago
    But how does that differ from traditional taxi outfits where these same drivers are not classified as employees?
    - brianwawok 10y ago
      Just because one place has a misclassification does not justify another. Just pointing at one class of people who are in the wrong class isn't a complete argument. see https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...
      - mc32 10y ago
        Well the question would be why did they wait decades before bringing up this issue and if it's decided otherwise will this then apply to traditional cab companies?
        toomuchtodo 10y ago
        Uber exerts far more control over the business transaction/experience than a taxi company does (in order to control the experience). Unless Uber shifts its model to a platform with less control over how the experience occurs, they will still fall under employee classification, and taxis will still continue to fall under independent contractors.
        10y ago
- tyingq 10y ago
  New York State's view: "A taxi driver, operator or lessee is an employee unless such person is leasing a taxi from the owner of the taxi and the owner of the taxi personally, regularly drives the taxi an average of 40 or more hours a week. For the lessee to be considered an independent contractor, the owner-operator may not control, direct, supervise, or have the power to hire or fire such lessee."[1] That seems to line up well with the IRS guide on determining if someone's role is an employee or contractor.[2] That is the trouble though...the rules aren't black and white. They are roughly a sum of various measures of "degree of control/independence". [1]http://www.wcb.ny.gov/content/main/onthejob/CoverageSituations/taxiCabs.jsp http://www.wcb.ny.gov/content/main/onthejob/CoverageSituatio... [2]https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...
  - Retric 10y ago
    Yes, cabs drivers can actually fit very closely with the ideal independent contractor model because they can pick people up at the curb and pocket full money from the trip after taxes. Uber on the other hand dispatches 100% of the work to their drivers and takes a direct cut every time. They both have a lot of flexibility and let people work any time of day or night. But, Uber has much tighter controls on work location and performance. Where a cab company only cares if service is terrible and someone calls to complain, Uber wants more than that and fires people for so-so performance. In the end Uber pretends to be setting up a market, however they act like drivers are employees.
    - netcan 10y ago
      That's a good answer. Is this the kind of reasoning playing out in the courts? As a complete aside, I think it's somewhat bogus for Uber to describe themselves a market. They use market-like mechanisms, but ultimately they set price. The price isn't something consumers and suppliers have input on. Drivers and consumers can decide to take or leave it. I think it's stretching the definition to call it a market. They just gave drivers the same sort of take it or leave it option as most businesses give consumers. The legal distinction between contractors and employees is legal semantics.
- taxicabjesus 10y ago
  People who work for ride-sharing companies are employees because their only way to make money is by making money for the company. Taxi companies frequently use the independent contractor model for their businesses. All of the larger taxi companies in Phoenix lease their cab out for a flat rate, and they don't care if the driver uses the vehicle to work the company's fares. All the old taxi drivers that I know have private clients - customers who call them directly for transportation. Uber-X drivers can't legally build up a private clientele unless they also have commercial insurance and have paid the state's fee for vehicles-for-hire. But that doesn't mean they don't give out cards anyways
  - ars 10y ago
    > People who work for ride-sharing companies are employees because their only way to make money is by making money for the company. That is not how the law defines employee. It has to do with the employer providing tools, and setting schedule. > Uber-X drivers can't legally build up a private clientele unless they also have commercial insurance and have paid the state's fee for vehicles-for-hire. And? What does that have to do with Uber? Just because they can't use their car to make money without Uber doesn't mean they are an employee of Uber - it just means Uber provides them some business leads.
  - dnautics 10y ago
    > People who work for ride-sharing companies are employees because their only way to make money is by making money for the company. As a lyft driver, I also made money from uber. I also made money contract coding, sometimes even doing work while in my car pulled over during off time. If anything the taxi model is more exploitative, reminiscent of the 'company town' era when the employee rented their living space and tools from the company.
    - toomuchtodo 10y ago
      Can I ask how much you make an hour from ridesharing after your expenses (fuel, maintenance, depreciation, insurance) are factored in?
- zucoug 10y ago
  Another thing. Do Uber drivers not agree to terms that specify that they are contractors, not employees. They may think that they should be classified as employees, but why does that matter if they made an agreement with Uber to act as a contractor. I don't see how they have any case for damages if they agreed to be contractors under their own volition.
  - tyingq 10y ago
    At least in the U.S., it doesn't work that way. The classification isn't a matter of contractually agreeing to it. It's driven by the nature of the relationship, and the degree of control and independence. https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...
    - zucoug 10y ago
      Oh I see. That does change things then
  - curried_haskell 10y ago
    To me this actually reflects the opposite. There is no contract negotiation, just a click-wrap agreement the terms of which are dictated to drivers by Uber. Prices and policies are dictated by Uber. Fees are collected and paid out by Uber. Drivers can be dropped unilaterally by Uber. Everything about this screams employer/employee relationship. Uber wants the benefits of being an employer, but none of the costs or responsibilities. They're going to ride their way to the top on the backs of their workers--get rich now and pay a few fines later. Justice will never be served for Uber.
    - viscanti 10y ago
      But it's more complicated than that right? I see a lot of Uber drivers also using competing apps. I don't see employees in any other industry working for two employers at the same time.
- rayiner 10y ago
  It's a murky area. On one hand, you're right, most taxi drivers are independent contractors. On the other hand, Uber goes to much greater lengths than cab companies to present a service behind a unified brand with a consistent experience. It sets requirements for cars, rates and "fires" drivers, etc.
  - jasode 10y ago
    >It's a murky area. Like you said, it's a gray area and applying the IRS 20 Questions does not yield an exact black & white determination of contractor vs employee. The drivers have hybrid attributes of both contractors and employees. In some ways, the Uber drivers are like "contractors" such as hair salon stylists, Hollywood stuntmen, fashion models, magazine photographers, etc. On the other hand, they are like "employees" such as UPS/FedEx/pizza drivers. >It sets requirements for cars, rates and "fires" drivers, etc. I've boldly said it before and I'll boldly predict it again: it is much more likely that Uber will tweak its "control" rules to act more like ebay/craigslist/AppleAppStore rather than switch to an employee model that pays for minimum hourly wages, worker's comp, health benefits, liability insurance, etc. The auction sellers and the iPhone iOS programmers uploading apps are not "employees" of Ebay and Apple and it's much more realistic for Uber to relax some rules to be more like Ebay rather than be more like FedEx. Why? Because we (the riders) won't pay for the higher fares (probably more than 2x the costs) to fund an employer/employee model. If Uber did switch to a more expensive "employee" organization, a new competitor that deliberately structured itself more like Ebay/Craigslist and utilized true "contractors" as drivers would undercut them. Riders en masse would pick the cheaper fare from a contractor rather than the 2x fare for an Uber employee. I think some observers confidently think that Uber will ultimately lose the "employee" classification legal battle and there will be a financial windfall for the 160,000+ drivers. For the reasons I stated above, that is not going to happen.
    - jdmichal 10y ago
      > I think some observers confidently think that Uber will ultimately lose the "employee" classification legal battle and there will be a financial windfall for the 160,000+ drivers. For the reasons I stated above, that is not going to happen. I don't see how Uber changing their behavior for the future prevents them from having to cover what they should have been providing in the past.
- SilasX 10y ago
  As always, the first question to ask is, what are you using the distinction for? Only then can you start making progress in the debate over the issue; otherwise, you're just committing the "Noncentral Fallacy"[1] of forcing something to be completely in one category (or the other) and attaching all of its usual implications, regardless of how special the case is. For example, instead of asking "is alcoholism really a disease?", you should be asking "Will it accomplish anything if I rebuke an alcoholic for drinking?" or "Are there medicines that will result in someone not drinking so much, with tolerable side effects?" So what is labor law trying to accomplish with the contractor/employee distinction? I don't have a good answer. As best I can tell, it's trying to meet two criteria: A) Ensure that legit independent businesses can exist and not be shut down for failing to pay themselves enough; and B) Ensure that, if you make someone economically dependent on you, you cancel out that dependence (sick pay, unemployment, worker's comp), just like we do for parental obligations, child support, alimony, and torts. Sadly, it turns out, the law commits the Noncentral Fallacy by acting as if everyone fully in one category or the other, so your "balance of factors" puts you squarely on one side or the other. A better way would be to require more "cancel dependence"-type benefits as someone becomes increasingly "employee-like" in the sense of becoming dependent. But I'm open for other explanations of the law. [1] http://lesswrong.com/lw/e95/the_noncentral_fallacy_the_worst_argument_in_the/ http://lesswrong.com/lw/e95/the_noncentral_fallacy_the_worst...
  - josu 10y ago
    I've never heard of a law committing a fallacy, AFAIK that's what the laws tend to do, create categories, you either commit a crime or you don't, you are either drunk driving or you are not...
deleted 10y ago
[deleted]
justncase80 10y ago
This title hurts my brain. I don't even know what it's trying to say.
- cloverich 10y ago
  if employees --> if classified as employees
- LoSboccacc 10y ago
  justincase80, if title unintelligible, risking headache: post says yodanews.com
- douglance 10y ago
  If Uber drivers were classified as employees, rather than contractors, they would be owed $730,000,000 from Uber as reported by US court papers.
xatan_dank 10y ago
This has probably occurred to everyone already, but I think Uber and Lyft are playing the long game. They're creating a firmly established business model initially nested in legal grey area and barging forward regardless of the speeding tickets they may have to pay. Human driver labor will eventually be replaced by far cheaper machine labor and the challenge of minimizing contractor/employee expenses will no longer be an issue. They're just racing to pack the first punch in what will be a gargantuan industry- the final outcome of the drivers' situation now seems like it will have little effect on the industry's long-term model.
jobu 10y ago
"... drivers who contend they should be classified as employees and therefore entitled to reimbursement for expenses, including gasoline and vehicle maintenance." Isn't all that tax deductible? Uber pays the drivers, and then the drivers will have to pay back the government since they can't claim it as a tax deduction anymore. Meanwhile, Uber gets the deduction and gets a tax refund. There has to be more to this than just mileage expenses, right? Otherwise it's a huge legal bill for a simple accounting shift. EDIT: Nevermind - I was confusing tax deduction with tax credit.
- harryh 10y ago
  It's not just an accounting shift. Getting 100% reimbursed for, say, your gas expenses is a lot more money than getting to deduct those expenses. A tax deduction is not the same thing as a tax credit.
  - Consultant32452 10y ago
    It's only not an accounting shift if it's awarded after-the-fact from this lawsuit which is a one-shot deal. In an efficient economic model the reclassified "employer" would lower your future earnings to pay for the fuel costs they were previously expecting you to pay for. And then it definitely is just an accounting shift.
    - harryh 10y ago
      It's not just about money though. There is a much greater administrative burden to hire an employee than to hire a contractor.
      - maxerickson 10y ago
        I think for large companies administrative burden is pretty much just a matter of money. (I had initially said they were fungible, but it only works one way)
        10y ago
skylan_q 10y ago
"Riders have saved $730 million by using Uber"
- balls187 10y ago
  "Uber has saved $730m by classifying drivers as independent contractors."
  - Consultant32452 10y ago
    "Uber paid $730m to its contractors to cover fuel costs and now has to pay them for it again."
- SilasX 10y ago
  Some small fraction of that, actually. Drivers were willing to work for that amount of money, and customers were willing to pay. If you mandated that they be paid something on top of that, the buyers can compensate buy paying less for the "base". Since the drivers were happy with the previous take-home, they'll be happy with the new "minus base plus mandated benefits". This is the problem with people casually suggesting that workers would be better off with mandated benefit x, y, or z. As long as Uber can still cut their portion, it can even out. (Or worse, if workers value the benefit less than the equivalent cash.) See the concept of tax incidence: just because someone is charged more, doesn't mean any specific factor has a different take-home. https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence
- deleted 10y ago
  [deleted]
jokoon 10y ago
Isn't Uber a good example of libertarian ideology? By the way, can drivers choose their rate?
- chipperyman573 10y ago
  >By the way, can drivers choose their rate? No
  - wnoise 10y ago
    Mostly no. But they can choose to work only when the surge pricing levels are above a certain point.
  - mtanski 10y ago
    No, but neither do yellow cab drivers in NYC that are working as independent contractors.
- oconnor663 10y ago
  Uber's a real company, so to the extent that any ideology describes the real world, Uber might be an example of it :) Libertarians tend think Uber is an example of the free market doing a better job than a highly regulated one. Other people think Uber is an example of the free market abusing labor more than a highly regulated one. If we agree that both are true to some extent, then I guess the next step is to find language for comparing those apples and oranges. (How should we measure consumer benefits, and how should we measure abuse, and then how much benefit is worth X additional abuse?)
- _delirium 10y ago
  Imo, Uber is a pretty good example of a company that highlights rifts in the libertarian movement over the extent to which large corporations directing labor are compatible with libertarianism. The kinds of libertarians who emphasize freedom of contract and the free market would see them as a great example. The kinds of libertarians who emphasize individual autonomy against collective decision-making might be less keen. There's an old disagreement over whether corporations are an example of freedom of economic association, or an example of a quasi-governmental collective coercion. Roughly: Milton Friedman vs. Lysander Spooner.
exclusiv 10y ago
I think compelling someone to be an employee of a company is stupid and governments are basically doing this. Not everyone wants to be an employee which forces you to be managed by the company and have less flexibility with your lifestyle. But I suppose those drivers that want to remain independent contractors could just register an LLC and then contract with Uber. Probably the most sensible so they could use multiple platforms too. Then California gets $800 per year per driver for the privilege of running an LLC. Not a bad strategy for the state. Squeeze the company, the employees and the contractors all at the same time.
- CPLX 10y ago
  One could make the argument that having our healthcare and basic social insurance be administered via company payrolls is insane. I might even join your party to reform that. But until we do it is disingenuous to pretend there aren't actual issues raised by Uber's attempt to evade that system.
Buge 10y ago
This whole $730M amount seems very strange to me. Surely if they were classified as employees instead of as contractors it would come with an accompanying pay decrease. If they decided to drive for Uber at the previously agreed rate as a contractor, wouldn't they also have accepted the job with a $730M pay cut if it came with a $730M reimbursement of their expenses? It sounds like they want to get paid for certain things twice.
- nickff 10y ago
  This lawsuit is not about what drivers want, it is about class-action lawyers and a named plaintiff getting paid out. You are right to say that the lawsuit will not benefit drivers, but the lawyers here are not looking to help the drivers at all. The 730M figure was the largest amount for which the lawyers could get a class-action case certified against a wealthy company.
cuchoi 10y ago
What is the definition of an employee? They are employees because: - Uber drivers can be fired. - They can't set up their own rates. - Have to follow several conditions. They are not employees: - Because they define their own working hours - They have no boss (though they can be 'fired' by the company)

deleted 10y ago

[deleted]

I really don't want to defend Uber, but how are Uber drivers employees, yet taxi drivers and livery drivers have always been independent contractors tied to a base or dispatchers for decades? There are a lot of labor abuses out there in America that I wish would get attention, including contractor classification, but I'm not sure this is one of them.

mc32 10y ago
Yeah that's one I don't quite understand either. From what I understand, if we put aside the ratings system, these platforms are easier to work with than traditional taxi services, where you were leasing vehicle and medallion from them. Here at least you can dip your toes if you like and stay or you can go as you wish. People talk about reimbursements for gas and mileage which they'd be owed if employed. But dont they know this to be the case beforehand and still accept the terms? I think people are seeing these valuations based on potential (platform, automation, etc.) and perceive it to be based on current services model and thus feel left out of the future windfall. In any case, drivers have an expiry date in the not too distant future, so grab what you van now.
- smileysteve 10y ago
  I think that Uber and Lyft would go a far way if they offered an information session (or linked w/ a startup space) that explains how to expense things.
  - dnautics 10y ago
    they can't do that, it would break the law unless they were certified to give financial planning advice.
    - nrb 10y ago
      His point is that, if you are correct, they could easily work with someone who is certified to give this advice.
      - dnautics 10y ago
        they can make referrals. And they do (lyft does anyway) but IANAL, but i think that's about the level of involvement they can do.
    - smileysteve 10y ago
      From 2 perspectives * Yes, they'd have to hire / refer / recommend a financial planner / accountant / or "not financial advice" * Any sort of non voluntary training could be construed as breaking the consulting relationship - but then again, franchises do this often as a b2b setup.
- dragontamer 10y ago
  Here's a hypothetical system that actually uses independent contractors. Lets say Newber (a new disruptive Uber competitor) starts up to explicitly conform to the independent contractor regulations. Newber drivers set their own prices, which are then published on Newber's app (sorted by some formula accounting for location + costs). When a passenger looks for a driver, they see the list of prices available, and then call the one that has the best price. Newber collects a small fee for the successful listing. In contrast, Uber sets the prices on both ends. Without the independence to set your own prices, Uber is closer to an employee/employer relationship than the classical Taxi models.
  - astrange 10y ago
    Sidecar did that - I tried it once after the Uber driver complained I wasn't using Sidecar for 15 minutes. All the rides were too expensive, so I didn't take any of them. And now they're out of business.
    - r00fus 10y ago
      Which means, really, Uber should consider it's drivers as employees. It makes a hell of a lot more sense if they do, they are just liable for more.
  - wnoise 10y ago
    Well, classical taxi models generally don't set the prices either, as state or city regulations almost invariably do that.
  - prostoalex 10y ago
    Sidecar did exactly that and, for what it's worth, never got in trouble with regulators on employment issues. Some of the complaints I've heard about the practice were about the driver-enforced surge pricing - some drivers would price the ride at $9,999.99 on New Year's Eve, so you always felt like if you let your attention slip a bit (perhaps the process would be sped up by alcohol consumption), you'd be gouged.
- marincounty 10y ago
  "Here at least you can dip your toes if you like and stay or you can go as you wish." I'm assuming you think Uber is a easy way to see if you can make money transporting poeople? 1) A lot of people are buying into Uber marking campaigns. They buying an Uber approved vechicle to test the waters. 2) These Four door Uber approved vechicles are expensive. It's different than leasing a cab for a few weekends. I've heard of people ruining their credit, and some even declaring bankruptcy when Uber dreams didn't work out. Buying the new black Prius is just a slap in the face? 3) http://driveubernyc.com/vehicles/full-list/ http://driveubernyc.com/vehicles/full-list/ It's this list that has me baffled on many levels. I love the marketing tool, at the top of this url. I guess because it's a contest they can dictate what independent drivers do? 50 hours a week 1.3 passengers/hr. Etc, etc.
brianwawok 10y ago
One could argue that many taxi drivers don't speak English as their first language, and thus are an easy to exploit group of workers. The same way we pay some migrant workers under minimum wage to pick crops from our fields, we abuse Taxi drivers? If a Taxi driver is given the car to drive, given set hours... seems like they are more an employee than an Uber employee picking his own hours and using his own car.
- mc32 10y ago
  But how does that differ from traditional taxi outfits where these same drivers are not classified as employees?
  - brianwawok 10y ago
    Just because one place has a misclassification does not justify another. Just pointing at one class of people who are in the wrong class isn't a complete argument. see https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...
    - mc32 10y ago
      Well the question would be why did they wait decades before bringing up this issue and if it's decided otherwise will this then apply to traditional cab companies?
      - toomuchtodo 10y ago
        Uber exerts far more control over the business transaction/experience than a taxi company does (in order to control the experience). Unless Uber shifts its model to a platform with less control over how the experience occurs, they will still fall under employee classification, and taxis will still continue to fall under independent contractors.
        10y ago
tyingq 10y ago
New York State's view: "A taxi driver, operator or lessee is an employee unless such person is leasing a taxi from the owner of the taxi and the owner of the taxi personally, regularly drives the taxi an average of 40 or more hours a week. For the lessee to be considered an independent contractor, the owner-operator may not control, direct, supervise, or have the power to hire or fire such lessee."[1] That seems to line up well with the IRS guide on determining if someone's role is an employee or contractor.[2] That is the trouble though...the rules aren't black and white. They are roughly a sum of various measures of "degree of control/independence". [1]http://www.wcb.ny.gov/content/main/onthejob/CoverageSituations/taxiCabs.jsp http://www.wcb.ny.gov/content/main/onthejob/CoverageSituatio... [2]https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...
- Retric 10y ago
  Yes, cabs drivers can actually fit very closely with the ideal independent contractor model because they can pick people up at the curb and pocket full money from the trip after taxes. Uber on the other hand dispatches 100% of the work to their drivers and takes a direct cut every time. They both have a lot of flexibility and let people work any time of day or night. But, Uber has much tighter controls on work location and performance. Where a cab company only cares if service is terrible and someone calls to complain, Uber wants more than that and fires people for so-so performance. In the end Uber pretends to be setting up a market, however they act like drivers are employees.
  - netcan 10y ago
    That's a good answer. Is this the kind of reasoning playing out in the courts? As a complete aside, I think it's somewhat bogus for Uber to describe themselves a market. They use market-like mechanisms, but ultimately they set price. The price isn't something consumers and suppliers have input on. Drivers and consumers can decide to take or leave it. I think it's stretching the definition to call it a market. They just gave drivers the same sort of take it or leave it option as most businesses give consumers. The legal distinction between contractors and employees is legal semantics.
taxicabjesus 10y ago
People who work for ride-sharing companies are employees because their only way to make money is by making money for the company. Taxi companies frequently use the independent contractor model for their businesses. All of the larger taxi companies in Phoenix lease their cab out for a flat rate, and they don't care if the driver uses the vehicle to work the company's fares. All the old taxi drivers that I know have private clients - customers who call them directly for transportation. Uber-X drivers can't legally build up a private clientele unless they also have commercial insurance and have paid the state's fee for vehicles-for-hire. But that doesn't mean they don't give out cards anyways
- ars 10y ago
  > People who work for ride-sharing companies are employees because their only way to make money is by making money for the company. That is not how the law defines employee. It has to do with the employer providing tools, and setting schedule. > Uber-X drivers can't legally build up a private clientele unless they also have commercial insurance and have paid the state's fee for vehicles-for-hire. And? What does that have to do with Uber? Just because they can't use their car to make money without Uber doesn't mean they are an employee of Uber - it just means Uber provides them some business leads.
- dnautics 10y ago
  > People who work for ride-sharing companies are employees because their only way to make money is by making money for the company. As a lyft driver, I also made money from uber. I also made money contract coding, sometimes even doing work while in my car pulled over during off time. If anything the taxi model is more exploitative, reminiscent of the 'company town' era when the employee rented their living space and tools from the company.
  - toomuchtodo 10y ago
    Can I ask how much you make an hour from ridesharing after your expenses (fuel, maintenance, depreciation, insurance) are factored in?
zucoug 10y ago
Another thing. Do Uber drivers not agree to terms that specify that they are contractors, not employees. They may think that they should be classified as employees, but why does that matter if they made an agreement with Uber to act as a contractor. I don't see how they have any case for damages if they agreed to be contractors under their own volition.
- tyingq 10y ago
  At least in the U.S., it doesn't work that way. The classification isn't a matter of contractually agreeing to it. It's driven by the nature of the relationship, and the degree of control and independence. https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo...
  - zucoug 10y ago
    Oh I see. That does change things then
- curried_haskell 10y ago
  To me this actually reflects the opposite. There is no contract negotiation, just a click-wrap agreement the terms of which are dictated to drivers by Uber. Prices and policies are dictated by Uber. Fees are collected and paid out by Uber. Drivers can be dropped unilaterally by Uber. Everything about this screams employer/employee relationship. Uber wants the benefits of being an employer, but none of the costs or responsibilities. They're going to ride their way to the top on the backs of their workers--get rich now and pay a few fines later. Justice will never be served for Uber.
  - viscanti 10y ago
    But it's more complicated than that right? I see a lot of Uber drivers also using competing apps. I don't see employees in any other industry working for two employers at the same time.
rayiner 10y ago
It's a murky area. On one hand, you're right, most taxi drivers are independent contractors. On the other hand, Uber goes to much greater lengths than cab companies to present a service behind a unified brand with a consistent experience. It sets requirements for cars, rates and "fires" drivers, etc.
- jasode 10y ago
  >It's a murky area. Like you said, it's a gray area and applying the IRS 20 Questions does not yield an exact black & white determination of contractor vs employee. The drivers have hybrid attributes of both contractors and employees. In some ways, the Uber drivers are like "contractors" such as hair salon stylists, Hollywood stuntmen, fashion models, magazine photographers, etc. On the other hand, they are like "employees" such as UPS/FedEx/pizza drivers. >It sets requirements for cars, rates and "fires" drivers, etc. I've boldly said it before and I'll boldly predict it again: it is much more likely that Uber will tweak its "control" rules to act more like ebay/craigslist/AppleAppStore rather than switch to an employee model that pays for minimum hourly wages, worker's comp, health benefits, liability insurance, etc. The auction sellers and the iPhone iOS programmers uploading apps are not "employees" of Ebay and Apple and it's much more realistic for Uber to relax some rules to be more like Ebay rather than be more like FedEx. Why? Because we (the riders) won't pay for the higher fares (probably more than 2x the costs) to fund an employer/employee model. If Uber did switch to a more expensive "employee" organization, a new competitor that deliberately structured itself more like Ebay/Craigslist and utilized true "contractors" as drivers would undercut them. Riders en masse would pick the cheaper fare from a contractor rather than the 2x fare for an Uber employee. I think some observers confidently think that Uber will ultimately lose the "employee" classification legal battle and there will be a financial windfall for the 160,000+ drivers. For the reasons I stated above, that is not going to happen.
  - jdmichal 10y ago
    > I think some observers confidently think that Uber will ultimately lose the "employee" classification legal battle and there will be a financial windfall for the 160,000+ drivers. For the reasons I stated above, that is not going to happen. I don't see how Uber changing their behavior for the future prevents them from having to cover what they should have been providing in the past.
SilasX 10y ago
As always, the first question to ask is, what are you using the distinction for? Only then can you start making progress in the debate over the issue; otherwise, you're just committing the "Noncentral Fallacy"[1] of forcing something to be completely in one category (or the other) and attaching all of its usual implications, regardless of how special the case is. For example, instead of asking "is alcoholism really a disease?", you should be asking "Will it accomplish anything if I rebuke an alcoholic for drinking?" or "Are there medicines that will result in someone not drinking so much, with tolerable side effects?" So what is labor law trying to accomplish with the contractor/employee distinction? I don't have a good answer. As best I can tell, it's trying to meet two criteria: A) Ensure that legit independent businesses can exist and not be shut down for failing to pay themselves enough; and B) Ensure that, if you make someone economically dependent on you, you cancel out that dependence (sick pay, unemployment, worker's comp), just like we do for parental obligations, child support, alimony, and torts. Sadly, it turns out, the law commits the Noncentral Fallacy by acting as if everyone fully in one category or the other, so your "balance of factors" puts you squarely on one side or the other. A better way would be to require more "cancel dependence"-type benefits as someone becomes increasingly "employee-like" in the sense of becoming dependent. But I'm open for other explanations of the law. [1] http://lesswrong.com/lw/e95/the_noncentral_fallacy_the_worst_argument_in_the/ http://lesswrong.com/lw/e95/the_noncentral_fallacy_the_worst...
- josu 10y ago
  I've never heard of a law committing a fallacy, AFAIK that's what the laws tend to do, create categories, you either commit a crime or you don't, you are either drunk driving or you are not...

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justncase80 10y ago

This title hurts my brain. I don't even know what it's trying to say.

cloverich 10y ago
if employees --> if classified as employees
LoSboccacc 10y ago
justincase80, if title unintelligible, risking headache: post says yodanews.com
douglance 10y ago
If Uber drivers were classified as employees, rather than contractors, they would be owed $730,000,000 from Uber as reported by US court papers.

xatan_dank 10y ago

This has probably occurred to everyone already, but I think Uber and Lyft are playing the long game. They're creating a firmly established business model initially nested in legal grey area and barging forward regardless of the speeding tickets they may have to pay. Human driver labor will eventually be replaced by far cheaper machine labor and the challenge of minimizing contractor/employee expenses will no longer be an issue. They're just racing to pack the first punch in what will be a gargantuan industry- the final outcome of the drivers' situation now seems like it will have little effect on the industry's long-term model.

jobu 10y ago

"... drivers who contend they should be classified as employees and therefore entitled to reimbursement for expenses, including gasoline and vehicle maintenance." Isn't all that tax deductible? Uber pays the drivers, and then the drivers will have to pay back the government since they can't claim it as a tax deduction anymore. Meanwhile, Uber gets the deduction and gets a tax refund. There has to be more to this than just mileage expenses, right? Otherwise it's a huge legal bill for a simple accounting shift. EDIT: Nevermind - I was confusing tax deduction with tax credit.

harryh 10y ago
It's not just an accounting shift. Getting 100% reimbursed for, say, your gas expenses is a lot more money than getting to deduct those expenses. A tax deduction is not the same thing as a tax credit.
- Consultant32452 10y ago
  It's only not an accounting shift if it's awarded after-the-fact from this lawsuit which is a one-shot deal. In an efficient economic model the reclassified "employer" would lower your future earnings to pay for the fuel costs they were previously expecting you to pay for. And then it definitely is just an accounting shift.
  - harryh 10y ago
    It's not just about money though. There is a much greater administrative burden to hire an employee than to hire a contractor.
    - maxerickson 10y ago
      I think for large companies administrative burden is pretty much just a matter of money. (I had initially said they were fungible, but it only works one way)
      - 10y ago

skylan_q 10y ago

"Riders have saved $730 million by using Uber"

balls187 10y ago
"Uber has saved $730m by classifying drivers as independent contractors."
- Consultant32452 10y ago
  "Uber paid $730m to its contractors to cover fuel costs and now has to pay them for it again."
SilasX 10y ago
Some small fraction of that, actually. Drivers were willing to work for that amount of money, and customers were willing to pay. If you mandated that they be paid something on top of that, the buyers can compensate buy paying less for the "base". Since the drivers were happy with the previous take-home, they'll be happy with the new "minus base plus mandated benefits". This is the problem with people casually suggesting that workers would be better off with mandated benefit x, y, or z. As long as Uber can still cut their portion, it can even out. (Or worse, if workers value the benefit less than the equivalent cash.) See the concept of tax incidence: just because someone is charged more, doesn't mean any specific factor has a different take-home. https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence
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jokoon 10y ago

Isn't Uber a good example of libertarian ideology? By the way, can drivers choose their rate?

chipperyman573 10y ago
>By the way, can drivers choose their rate? No
- wnoise 10y ago
  Mostly no. But they can choose to work only when the surge pricing levels are above a certain point.
- mtanski 10y ago
  No, but neither do yellow cab drivers in NYC that are working as independent contractors.
oconnor663 10y ago
Uber's a real company, so to the extent that any ideology describes the real world, Uber might be an example of it :) Libertarians tend think Uber is an example of the free market doing a better job than a highly regulated one. Other people think Uber is an example of the free market abusing labor more than a highly regulated one. If we agree that both are true to some extent, then I guess the next step is to find language for comparing those apples and oranges. (How should we measure consumer benefits, and how should we measure abuse, and then how much benefit is worth X additional abuse?)
_delirium 10y ago
Imo, Uber is a pretty good example of a company that highlights rifts in the libertarian movement over the extent to which large corporations directing labor are compatible with libertarianism. The kinds of libertarians who emphasize freedom of contract and the free market would see them as a great example. The kinds of libertarians who emphasize individual autonomy against collective decision-making might be less keen. There's an old disagreement over whether corporations are an example of freedom of economic association, or an example of a quasi-governmental collective coercion. Roughly: Milton Friedman vs. Lysander Spooner.

exclusiv 10y ago

I think compelling someone to be an employee of a company is stupid and governments are basically doing this. Not everyone wants to be an employee which forces you to be managed by the company and have less flexibility with your lifestyle. But I suppose those drivers that want to remain independent contractors could just register an LLC and then contract with Uber. Probably the most sensible so they could use multiple platforms too. Then California gets $800 per year per driver for the privilege of running an LLC. Not a bad strategy for the state. Squeeze the company, the employees and the contractors all at the same time.

CPLX 10y ago
One could make the argument that having our healthcare and basic social insurance be administered via company payrolls is insane. I might even join your party to reform that. But until we do it is disingenuous to pretend there aren't actual issues raised by Uber's attempt to evade that system.

Buge 10y ago

This whole $730M amount seems very strange to me. Surely if they were classified as employees instead of as contractors it would come with an accompanying pay decrease. If they decided to drive for Uber at the previously agreed rate as a contractor, wouldn't they also have accepted the job with a $730M pay cut if it came with a $730M reimbursement of their expenses? It sounds like they want to get paid for certain things twice.

nickff 10y ago
This lawsuit is not about what drivers want, it is about class-action lawyers and a named plaintiff getting paid out. You are right to say that the lawsuit will not benefit drivers, but the lawyers here are not looking to help the drivers at all. The 730M figure was the largest amount for which the lawyers could get a class-action case certified against a wealthy company.

cuchoi 10y ago

What is the definition of an employee? They are employees because: - Uber drivers can be fired. - They can't set up their own rates. - Have to follow several conditions. They are not employees: - Because they define their own working hours - They have no boss (though they can be 'fired' by the company)