
Are Uber Drivers Employees? The Trial That Could Devastate the “Sharing Economy” - llamataboot
http://www.slate.com/blogs/moneybox/2015/03/12/uber_lyft_employment_cases_juries_could_decide_the_legal_fate_of_the_sharing.html?wpsrc=fol_tw
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rtpg
Here's a link to the IRS's general test on misclassification of employees, can
be interested in walking through

[http://www.oregon.gov/ODA/shared/Documents/Publications/Natu...](http://www.oregon.gov/ODA/shared/Documents/Publications/NaturalResources/20FactorTestforIndependentContractors.pdf)

There are 20 points to consider in total. some of the ones that don't come up
in these discussions but probably should:

• Degree of business integration. Workers whose services are integrated into
business operations or significantly affect business success are likely to be
considered employees.

• Control over discharge. A company's unilateral right to discharge a worker
suggests an employment relationship. In contrast, a company's ability to
terminate independent contractor relationships generally depends on contract
terms.

• Right of termination. Most employees unilaterally can terminate their work
for a company without liability. Independent contractors cannot terminate
services without liability, except as allowed under their contracts.

~~~
aabajian
>...significantly affect business success are likely to be considered
employees.

If all the drivers were fired, Uber / Lyft would be out of business. If this
point holds any weight, I'd say they'd have to be considered employees.
Applies to taxi drivers as well.

~~~
Dylan16807
On the other hand individual drivers have next to zero affect on business
success.

And people contract out critical things all the time, it's not _that_ simple.

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jeswin
> Their hours are flexible—but only to a point. Uber, for example, has
> threatened to suspend the accounts of drivers who accept less than 90
> percent of rides.

The second statement does not follow from the first. Uber is probably saying
that if you're on the grid, you have to accept 90% of the rides. This totally
makes sense; otherwise users will not be able to get a ride even when they see
cars all around. Uber is (probably) not saying that drivers should log in for
a certain number of hours every day.

~~~
pbreit
And what does this mean: an employer’s “right to discharge at will, without
cause” as “strong evidence in support of an employment relationship.”

Aren't contractors easier to discharge?

~~~
jsprogrammer
Contracts typically have a term length.

~~~
rodgerd
As a Kiwi it seems bizarro land - you have to have cause to fire someone in
permanent employment, but you can (generally) end contracts prematurely with
appropriate terms.

~~~
jsprogrammer
What exactly is a contract if it doesn't have a length attached to it?

In most US states it is legal to have, and most companies do have, policies
that state something to the effect (and yes, it's often in all caps):
EMPLOYMENT RELATIONSHIP IS AT WILL, NEITHER PARTY HAS ANY OBLIGATIONS TO THE
OTHER PARTY AND EITHER PARTY CAN TERMINATE THE RELATIONSHIP AT ANY TIME FOR
ANY REASON.

~~~
jobigoud
This notion is extremely foreign to me as a French and I think most of Europe
(except UK) find this type of clause completely abusive. Our standard
employment contract here is the CDI : contract of indeterminate duration. Both
parties have an incompressible time window to respect if they want to
terminate the contract, usually several weeks.

~~~
iamflimflam1
Standard in the UK is one months notice on both sides - I've never had a
contract that stated anything shorter and have had friends who have been on
3-6 months notice period.

Though it looks like the Statutory notice period can be less.

[https://www.gov.uk/redundant-your-rights/notice-
periods](https://www.gov.uk/redundant-your-rights/notice-periods)

~~~
vidarh
In Norway it is near impossible to create a valid employment contract for full
time workers with less than 3 months notice (doesn't matter what the contract
_says_ , on the basis of the principle that employers are expected to have
massively more power during negotiation; you can deviate from it, but it
generally requires consideration above and beyond the potentially lost pay).

In general employees not only have the right to keep getting paid, but have a
legal right to continue to carry out their duties unless there are specific
circumstances (e.g. they've been fired for gross negligence or for losing an
essential license). The right to work was even embedded in the 1814
constitution, though that right is pretty tooth-less.

Moving to the UK was a major culture shock.

The US seems like a different planet.

------
Frondo
The "sharing" economy is a misnomer--what Uber represents is the "mis-
classified contractor" economy.

~~~
icebraining
Taxi drivers were already classified as independent contractors, even when
working for large cab companies. In fact, they sued four of them in Chicago
just last year[1].

Despite of the jab in the headline, Uber et all didn't create this situation,
and they may in fact have the (unintended) consequence of fixing this and
other long lasting issues with the taxi industry.

I don't like Uber, nor their business practices, but I do appreciate the kick
in the status quo.

[1] [http://articles.chicagotribune.com/2014-03-26/news/chi-
suit-...](http://articles.chicagotribune.com/2014-03-26/news/chi-suit-taxi-
drivers-should-be-considered-employees-20140326_1_taxi-drivers-yellow-cab-
taxi-industry)

~~~
rtpg
I don't get the kick in the status quo,since they're doing exactly the same
shit other taxi companies are doing, but with a nicer app and sidestepping
regulations.

At least for drivers, this doesn't seem like a better deal in the long term

~~~
icebraining
Not the same thing. First, taxi drivers used to have to pay to lease the
medallions. This article from 1995¹ talks about paying ~$100 _per shift_ just
for the lease. A quote from that article:

 _In 1993, 32 to 45 percent of the income of a fleet or lease manager was
profit, or $16,000 to $21,300 per car, up from $5,500 to $9,800 in 1986,
according to the taxi commission._

I very much doubt Uber makes anything close to that per car - even
disregarding inflation.

But besides that, do you think it's a coincidence that taxi drivers sued the
companies last year, after decades of that system being established? When I
said "kick the status quo", that doesn't mean they have any _intentions_ of
being better to drivers than taxi companies; but they still shook a broken
system from its torpor and forced society to reevaluate it. To me, that's
almost always an advantage.

¹ [http://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-
di...](http://www.nytimes.com/1995/04/09/nyregion/driving-a-taxi-difficult-in-
best-of-times-gets-tougher.html)

------
brohoolio
With the amount of money on the line I can only assume they'll get the laws
changed in favor of those with the deep pockets.

------
itsbits
"Independent contractors are generally treated as workers who serve multiple
clients, have a high level of control over their work, and complete specific
jobs over a limited period of time that fall outside the usual scope of their
current employer’s business."

By the definition looks like Uber and Lyft are in serious danger.

~~~
pbreit
By that definition is looks like they are in the clear. Many drivers drive for
multiple clients. They have a high level of control over their work. Not
exactly sure I understand the third part beyond "specific jobs over limited
periods of time" which is also the case.

~~~
vertex-four
> They have a high level of control over their work.

No, they don't. They are told when to pick up their passengers, and which
route to drive, by their employers. They may not deviate from that route, they
may not pick up passengers without Uber's say-so. They may not decline
passengers without being penalised. While they are signed in to Uber,
precisely what control do they have over their work?

Additionally, "complete specific jobs over a limited period of time that fall
outside the usual scope of their current employer’s business" means that the
test falls on the side of being a contractor if you are doing a one-off job
that is not usually what the company does, and an employee otherwise.

The point is, a contractor is that person you bring in to write code for your
SAP system, or fix the IT infrastructure, or build a new building, or program
the A/C. Things where you give the contractor a task, and they complete it
using their knowledge, where you don't get to define the specifics of how it's
done.

If you want control over precisely how they do their job, and it's part of
what makes the company money on a day-to-day basis (you can argue that Uber
are selling their software platform all you want, but the service it actually
provides is getting you a taxi, not access to its software), I don't see how
they're not employees.

~~~
fancyketchup
Anecdotally, what you're saying simply isn't true on many counts. On my twice-
weekly airport run, I usually ask the drivers what they think of Lyft and
Uber. Their characterization of the relationship is diametrically opposed to
what you wrote.

One of the benefits I hear most frequently mentioned is being able to simply
shut off the app any time they like (while not actively carrying a passenger,
of course). Drivers, in other words, have complete control over their working
hours. In addition, drivers, not Uber/Lyft choose _where_ to work: They can
hang around the airport, downtown, or out in the suburbs.

Drivers are also not penalized for refusing individual fares--only for
refusing greater than some threshold fraction of fares offered. Uber. Uber and
Lyft do not prescribe the route a driver must follow, either. The app does
offer a suggested route (which is not usually the best on Uber--maps in their
driver app are notoriously poor), but the driver and passenger have the
flexibility to use a different one.

This is how it works _in practice_ , and frankly it seems to me that they are
bona-fide contractors.

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jinushaun
How about instead of trying to regulate Uber/Lyft, fix traditional taxis
instead? Force them to accept credit cards, abolish tips, support e-hailing
(make it a standard protocol that apps can adhere to), make empty/full
indicators that actually work for street hails, don't artificially limit taxi
supply with an idiotic medallion system, etc.

Or make public transportation that works for the people so they don't need
Uber (looking at you, Seattle and SF). I actually hate Uber and don't like to
use them. But I've been burned so many times by traditional taxis that I hate
them more. I'd rather use a subway.

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lsc
I really hope we get some clarity out of this. Right now? The IRS has a very
complex test for what constitutes an employee vs. a contractor.

Personally, I don't much care where they draw the line, but my life would be
easier if they were more clear about exactly where they were drawing the line.

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carrotleads
We play in the sharing economy too though not in the states. But some much
needed clarity would be welcome and so will keep a keen eye on this. Would
Uber/Lyft relaxing their regulations make the drivers more like contractors?

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venomsnake
It will not devastate the sharing economy. It will devastate the "sharing"
economy where you try to bypass government regulations by pretending you are
not some kind of service.

There are a lot of ways of people to share car rides, small jobs - just not so
easy to heavily monetize.

~~~
Dylan16807
I'm pretty sure that's what "sharing economy" means. And it's not even true to
that extent; I don't see how this would have any effect on things like airbnb.

~~~
venomsnake
No it does not. A carpooling app for people that want to get from A to B and
everyone chips for gas is sharing. Ordering a ride for person that does this
all day is taxi.

Couchsurfing - sharing. AirBNB - hotel. It is really simple.

~~~
Dylan16807
That's just sharing. You have to build mass infrastructure around something
like that to get "sharing economy".

I agree that the distinction between at-cost sharing and for-profit "sharing"
is a mess.

When you say hotel, I hope you mean that the person renting the room is
running a hotel. That I can agree with. But I would not call AirBNB itself a
hotel, as some people do.

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dnautics
The best counterargument is that Uber drivers are very much allowed to work
for other rideshares simultaneously, and very often they do.

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stuaxo
Of course they are bloody employees, end of !

