1) Drivers providing their own cars is not a strong factor - pizza delivery employees also drive their own cars.
2) Uber "control the tools that drivers use" by regulating the newness of the car.
3) Uber exercises extensive control over vetting and hiring drivers and requires extensive personal information from drivers.
4) Uber alone sets prices, and tipping is discouraged, so there is no mechanism for driver (as "contractor") to set prices.
5) Plaintiff driver only provided her time and car. "Plaintiff's work did not entail any 'managerial' skills that could affect profit or loss."
6) Drivers cannot subcontract (presumably negating Uber's position as a "lead generation" tool for contractors).
Sorry that these are out of order. Look on Page 9 of court documents for full text.
1) Chicken farmers own and provide equipment that (2) the parent company requires and has set standards.
3) The contractee chooses farmers based on some criteria(not certain, but I would assume it's fairly extensive).
4) Contractee sets prices; the farmers do compete with each other for the best pay based on quality, but the farmers do not set prices. Chicken quality could be seen as equivalent to Uber's pay based on hours/distance driven.
5)Chicken farmers do possess skills that influence Tyson's profit or loss, so this point differs.
6)I'm very much doubt that the farmers can subcontract.
7) The chicken farmers are vital to the contractee's business; the profit of Tyson and other companies that use poultry contracts depends primarily on the supply and quality of the chickens raised by the contracted farmers.
Overall, Uber drivers and contracted chicken farmers seem fairly similar though the chicken farmers may conform slightly more to the traditional contractor role.
e.g. I could be paid by a farmer to to work on such a chicken farm (presumably many people are), but I can't be paid by an Uber employee to cover their shift. That is a critical difference.
This seems an extension of the existing South African minibus taxi industry model, where drivers make a daily quota for taxi owners, then keep the rest. (It has also led to at least one early-afternoon Uber ride with a very sleepy driver who was up from before dawn making his quota for his owner).
In any case, in South Africa, at least, Uber is clearly acting as a facilitator, rather than a direct employer.
I think it would be a pity if rulings like the one in OP lead to the worldwide emergence of capital-rich fleet owners taking on the role of employers, because Uber became hesitant to deal with individual driver/owners for fear of being designated as their employer.
It's a little rare to actually see the same person driving as is in the official picture in the cab. But then again, the cab is used 24/7 for maximum efficiency...
This is Tyson's overview of their contracts: http://www.growwithtyson.com/overview-of-contract-poultry-fa...
(Edit--I did find some vage(pretty much state regulations) at Tyson, but if anything they don't regulate their independent farmers enough?)
>Uber alone sets prices
is the killer one. I guess the only solution to that would be to make it more of a market where drivers could choose their rate to compete.
This is how every other independent contractor works.
Riders set the rates with demand based pricing and drivers choose which one gives them the best opportunity at each trip request. That's a unique situation, so a comparison to "every other independent contractor" misses the point here.
Also, Uber actively discourages this by penalizing drivers who skip to many fares, which suggests they really don't want you to do this.
When Uber caught on, they added the penalty.
But in this case, when a driver takes a Lyft passenger instead of an Uber passenger, they are actively taking business from Uber. This is more like an employee working at a call center, and answering calls for another call center on their cell phone instead of taking the ones that are ringing at their desk.
Ebay for instance, the suppliers set the prices. Amazon Marketplace: the seller sets the prices (not Amazon).
Uber sets the prices, NOT the free market.
Uber is a price setting monopoly, the "sole authority" of the price within the Uber "marketplace". Consumers do NOT have any ability to change the price. Nor do any of the Uber drivers.
Taxis never were a free market either. But at least they didn't pretend to be one like Uber does.
> Uber is a price setting monopoly, the "sole authority" of the price within the Uber "marketplace".
Within the Uber marketplace dilutes the definition of "monopoly" into meaninglessness. Uber competes for drivers with Lyft, SideCar, taxi companies, limo companies, and, well, every other company hiring (relatively) unskilled labor. Uber competes for passengers with, uh, again, Lyft, SideCar, and taxi companies.
A free market does not require that consumers have the freedom to choose exactly what price they will pay for a particular product or service. What defines the free market is the ability to choose between competing products and services.
Can the Uber drivers, within the Uber marketplace, compete with each other? If yes, then they are acting like independent agents. If not, they are acting like employees.
So, is Uber acting like a market, or like an employer?
Uber has one job. Connect riders with drivers.
The "libertarian" solution is to provide a marketplace where drivers can sell their services to riders. Drivers can compete against each other by raising or lowering prices, while riders can compete against each other by similarly increasing or decreasing the bid.
Uber pretends to do this, but with a distinct difference. Uber sets all the prices. Therefore, Uber is anything BUT a free market.
Maybe you don't get it because you haven't been paying attention to Uber marketing. But I'm not claiming that Uber has no competitors. What I'm saying is within Uber's "marketplace" of "independent contractors", the drivers and riders are in fact helpless to Uber's pricing whims.
Uber is NOT a free market. But they are trying to market themselves as one. This is a distinct reason why Uber drivers have been declared to be employees.
> The "libertarian" solution is to provide a marketplace where drivers can sell their services to riders.
States create solutions. The libertarian "solution" is to do nothing and let the interactions happen organically. This could mean a marketplace, it could mean other things. It really depends on what people want, the locality, technology available, etc. And sometimes people actually want a monopoly and are happy with that. Facebook is practically a monopoly and I don't think people want 2 main social networks.
> Uber pretends to do this, but with a distinct difference. Uber sets all the prices. Therefore, Uber is anything BUT a free market.
I agree that Uber by itself is definitely not a free market place. I'll take your word that their marketing paints a different picture--seems likely.
You are confusing anti-trust law ( or something else ) with labor law.
A misnomer. Uber sets the prices, not the market. Uber can market the concept as much as it wants, but it doesn't change the fact that Uber sets the prices and therefore, no free market really exists.
Riders don't set the rates, no... but I'm not sure what that has to do with a free market.
 - http://www.forbes.com/sites/andrewbender/2015/04/10/ubers-as...
> Uber is arguably the #1 regulatory power in the U.S. personal transportation sector.
I would reserve the phrase "regulatory power" to government. I think you're using it here for the hyperbolic value.
I am being snarky, but the libertarian poster-child is shielding 46% of the national market from competition (drivers can't compete with eachother) and that's pretty ironic.
> A free market is a market system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.
Uber is a price-setting monopoly within the Uber market. Uber is the sole authority in the prices that consumers pay and that drivers receive.
The Uber marketplace is NOT a free market. QED. Its rent-seeking behavior on behalf of the owners.
Consider a counterexample - eBay is clearly a market. Independent buyers and sellers agree to transactions, on their own terms. eBay competes for the attention of both buyers and sellers, in terms of service and fees, not on the prices of the actual goods in the market.
If the competition that's happening in the transportation market is between Uber and Lyft, and that competition is on the price of rides and quality of rides, then Uber isn't a market, it's a vendor in a market - and thus the drivers aren't vendors within Uber's market, they're just employees of Uber.
As an employer Uber can set shifts for its employees and ban them from taking jobs from anywhere else while on shift.
I wonder what Uber's new privileges with respect to its workers will cost. What benefits are California employers required to pay? Paid vacation? Pay in lieu of notice for termination without cause? Employment insurance contributions? Social security contributions?
It's all going to be a moot point in the end. Transport automation is coming.
Uber's biggest asset is the installed customer base. Uber's drivers are technically their biggest liability... as this ruling well demonstrates!
I'll also speculate this this is a pretty big competitive advantage. Collecting that much ride data is not trivial.
Actually it pretty much is, if you're willing to snoop on handshaking data from peoples' cell phones.
When I want to get from point A to point B, it doesn't really matter what my friends or other people are using, I just personally want good service at a good price - and I don't think I'd be particularly loyal to any one provider.
I expect that smaller regional providers of self-driving taxis would be able to compete on even footing with larger companies, once self-driving vehicles are purchasable commodities without heavy R&D costs.
If Uber can operate 100,000 robo-cars in San Fran you can walk up to the sidewalk and press Hail and presto you have your ride. They can dynamically balance load between nearby cities on a day-by-day even hourly basis dispatching streams of robo-cars from their garages when the surges hit. Large events which drive demand are pre-scheduled and automatically reflected in both car distribution and the number of gasoline futures they trade on the options board for the upcoming week, etc. etc.
You can bet these robo-cars will be getting robo-tire-rotations and any other effeciencies they can squeeze out. (Imagine a line of them going through Uber's robo-washers)
5? 10? 15 years out? Doesn't really matter but I'm convinced it will eventually happen. It will be awesome and terrible all at once.
Incidentally, this is why car manufacturers like Daimler and VW are running carsharing systems
Companies like Uber face problems most of us can't even imagine, such as regulatory capture by the incumbent taxi industry. Yes, Uber plays dirty, but to some extent I think they have to, because it's a dirty game.
No, it really isn't. There isn't anything special about them, unless you're one of those people that believes a patent should be granted for an existing process simply because now it says, "on a computer".
In the model where contractors are dispatched to handle some task by phone the contractor is able to make counter offers to the company. Eliminating that through automation affects the legal test. The point I was replying to about the ability to choose jobs from different clients (Uber vs Lyft vs all the other edelivery services) also makes this different.
This is a complex area of law, which I'm guessing you haven't personally litigated, so you incorrectly compare it to the software patent issue.
I knew someone who worked at a grocery store that was 24/7. Except they did close on Christmas, New Years, and Thanksgiving. The store's insurance was for a 24/7 operation - which meant that someone had to be in the store even those 3 times a year it was closed. So my friend's job 3 times a year was just to sit in an empty store by himself. Just to comply with the insurance policy.
I knew someone who was a master control operator for a TV station for the overnight shift. He told me his job was "make sure the TV doesn't go off the air" which ended up being that he was on the internet and watching TV his whole shift since the TV broadcast very rarely malfunctions. (I don't know if this is usual or not for a master control operator)
No, it isn't. There isn't anything special or unique about Uber that says they should be exempt from existing law.
"Riders set the rates with demand based pricing"
No, they really don't. I have no ability as a user to state how much I'm willing to pay for a trip.
How is that different than Uber?
In Santa Cruz Transportation, Inc. v. Unemployment
Insurance Appeals Board (1991) 235 CA 3d 1363;
1 Cal Rptr 2d 641, the Appeals Court held the drivers
who paid the taxicab company a fixed-fee to lease a
taxicab were common law employees of the company
This may simply not have been tested in court (or not in any newsworthy case). If you keep a small number of independent contractors happy enough, they won't split hairs over this issue.
As I said to you previously (https://news.ycombinator.com/item?id=9592532 ): What value do you expect to get out of demanding that people analyze these random situations? Ultimately, it's the government bureaucrats and legal system that make the decisions, so even if someone gives you some relatively definitive answer, it could still turn out to be wrong.
The determination is made by applying a series of subjective standards, looking at situations that are somewhat comparable along one of those standards is not necessarily going to inform the outcome if the other standards are subjectively more important.
There is room to articulate some frustration with the seeming arbitrariness of the law, but do that instead of asking argumentative questions that are only vaguely interesting to the topic.
But then the driver loses the ability to see when the price goes back up.
If you are "ON" the Uber app, you are required to accept the Uber price, or you get penalized. At no point can you say, "I am willing to accept this price which is lower than Uber." nor can you say "I am not willing to accept a fare below this price for this distance."
In Reno, you hardly ever see a taxi driving, so they can all be called for a pickup. I honestly don't know if one would stop if you hailed it.
Aside from real limos, I can't remember seeing luxurious taxis outside of New York. But if they exist, it would be because the local laws allow them to charge a different rate than regular taxis.
It's not as it uber is the only employer - most drivers I've seen use lyft as well and choose between them at will.
As a rider, I cannot tell Uber I want to pay $20 to get me to the airport, I can accept their prices or not use the service. Uber is setting the prices for their drivers.
How about Sidecar's approach of actually letting drivers price their services (to some degree)?
(I am so glad the government stepped in on this one.)
Cites precedent in Santa Cruz Transportation v. Unemployment Insurance Appeals Board. Here's what's relevant to Uber:
1) Drivers could be terminated if they did not maintain good relations with the public.
2) The company required the drivers to account for the
fares they received.
3) The work did not require the expertise of a skilled
4) The drivers depended on the company’s dispatcher
for their livelihood.
5) The drivers did not set their own rates, but were paid
according to the number and distance of fares they
6) There was no evidence of entrepreneurial
7) The customers called the company and the company
arranged for the performance of the services.
8) The drivers did not advertise their services.
9) The driver’s work was part of the regular business of
the taxicab company.
1. We're not allowed to receive tips.
2. They take 20% of our commission anyways.
3. Who gets tipped here? Uber does, not me.
4. I use my own car, quite frequently, and unlike a pizza delivery guy, the valuable that I'm transporting is another person's life.
5. If I get into an accident, my insurance screws me.
6. I don't get paid enough.
Well, unless you purchased specific insurance to cover the cost of driving your car for business use of transporting people.
Of course, for this to be done well they need to pay the drivers enough that tipping is not necessary.
Yes, the valuable you're transporting is another person's life, and you're doing it in such a way that circumvent all regulatory safeguards to protect that.
Don't make Uber out to be selfish and greedy when you're doing the same.
And you aren't self-interested or greedy when you find the opportunity?
And why do you work for a company that is so terrible? Find a new occupation or work for a competing service.
Drivers absolutely choose their tools and invest heavily in those tools which directly impact their profitability and their ratings. Drivers absolutely employ managerial skill in deciding what hours and how many hours to work and what areas to drive in to get the best passengers and best ratings.
For example, the last Uber ride I took, the driver explained how they specifically avoid driving during certain time frames and certain locations because the fares are more likely to damage their tools, or leave poor ratings, or start yelling at them randomly.
> Uber exercises extensive control over vetting and hiring drivers...
For a pretty lose definition of 'extensive'. Nothing compared to a typical job interview and vetting process that a real hire goes through. How many dollars per contractor does Uber spend validating drivers? Probably averages to something like $25 - $50. There's a validation process, certainly, but it's hardly a "vetting" process.
> But for Defendant's intellectual property, Plaintiff would not have been able to perform the work
This is also absolutely not true. There are a number of different apps which would allow the plaintiff to perform substantially the same work using the same tools and the same business plan. But for using the Uber app, they would not be able to pickup Uber fares, obviously, but that's a tautology. They certainly would be able to perform the same work though. Or they could write their own app and perform the same work (obviously fighting the network effect, they may not succeed, but it's certainly possible).
The fact is that plaintiff can drop Uber on Monday and be driving for Lyft on Tuesday, or even drive for both concurrently and arbitrage between the two apps.
Personally I think this ruling goes too far, but it is a close call and it will be very interesting to watch this develop. The chicken farmer analogy is a good one. If Uber drivers are employees, it actually breaks a fairly large number of well established business models. I think this has more to do with push-back against Uber specifically than technical compliance with the law.
I keep seeing this, why do you believe that because people are using more than one app it makes it impossible for them to be employees? Why can't someone work more than one job and be considered an employee of both?
They can't be hourly, because in any given hour they may work for two different companies. They can't be salary, because they are collecting income from both companies concurrently.
So what are they? Minutely employees?
Even if you try to say that they are minutely employees, you have to account for the fact that there is no preset schedule, or even an expectation that the Uber driver must take a fare offered them. In other words, there's no "boss"; the computers are just making a series of offers, some of which may be accepted and others rejected.
Again, not an expert; just using my intuition.
Since each effective work 'shift' begins with picking up a rider and ends once they're dropped off, outside of the taxi industry the best comparison i can make off the top of my head is the workers of one of those 900s numbers. They can work from home and accept calls as they please, with each payment being independent of the next. I'm not sure if they're contractors or not, never really looked into it, but they would be 'minutely employees', so to say. You don't even really need a 'boss' in that situation either, just a computer switching calls.
I think the "ruling" is pretty silly. The Uber model is reasonable. Maybe some tweaks are needed but from a high level it's a legitimate approach.
Coder is a better question. I think the argument is that they have a lot more freedom in what they do... i.e. pick their own libraries etc.
Fast food workers, retail workers and such? They're hourly employees, but employees nonetheless.
1.) Agents are mandated to use their company logo and brokerage info in all ads, both by NYC law and by the company. Some companies have strict dress code requirements when meeting clients.
2.) The brokerage firm definitely controls the tools used, from internal databases to marketing syndication tools to in-house CRM systems.
3.) The brokerage firm has vicarious liability over the actions of their agents (also mandated by NYC law). For that reason the brokerage firm has a huge incentive to vet their employees.
4.) Agents generally have very little discretion if any on the commission charged. The brokerage firm sets commission policies and any deviations must be approved by the managing broker or associate broker.
5.) I highly disagree with the court ruling here [edit: administrative ruling?]; my understanding is Uber drivers are free to turn off the Uber app and operate without the source of leads generated, and that certainly impacts PNL (if that's not the case, agents still can't simply ignore leads forever without getting fired). Uber doesn't mandate when or where the work is done. Same with agents, the brokerages generally can't impact when or where the work is done, with the exception of some mandatory company wide meetings. Firms tend to provide desk space and equipment.
6.) An agent hired by a brokerage firm may not "subcontract" by having a friend show up in his place and conduct the work, even if the friend is a licensed real estate agent -- the brokerage, assuming vicarious liability for the actions of all their agents, would not allow it. This is different from an overworked agent asking a colleague to take over clients, both are still agents of the brokerage.
Additionally, New York law is not California law, and 1099 vs W-2 distinction is a federal tax law distinction, which is distinct from California, New York, or even federal labor law employee/contractor distinctions (though some of the factors that are relevant may be similar between those different sources of law.)
> I highly disagree with the court ruling here
There is no court ruling, its an administrative ruling that is being appealed to a court.
1. This is an appeal from a decision by a hearing officer of the California Labor Commissioner. Most of the time such officers spend their days hearing things such as minimum wage claims. Hearings do not follow the strict rules of evidence and are literally recorded on the modern equivalent of what used to be a tape casette instead of by a court reporter. Such hearings might run a few hours or, in a more complex case, possibly a full day as the normative max. The quality of the hearing officers themselves is highly variable: some are very good, others are much, much less than good in terms of legal and analytical strengths. In a worst case, you get nothing more than a pro-employee hack. The very purpose of the forum is to help protect the rights of employees and the bias is heavily tilted in that direction. That does not mean it is not an honest forum. It is. But anything that comes from the Labor Commissioner's office has to be taken with a large grain of salt when considering its potential value as precedent. Hearing officers tend to see themselves as those who have a duty to be diligent in protecting rights of employees. Whether what they decide will ever hold up in court is another question altogether.
2. Normally the rules are tilted against employers procedurally as well. When an employer appeals a Labor Commissioner ruling and loses, the employer gets stuck paying the attorneys' fees of the prevailing claimant on the appeal. This discourages many employers from going to superior court with an appeal because the risk of paying attorneys' fees often is too much when all that is at stake is some minimum wage claim. With a company like Uber, though, the attorney fee risk is trivial and all that counts is the precedential value of any final decision. It will therefore be motivated to push it to the limit.
3. And that is where the forum matters a lot. The binding effect of the current Labor Commissioner ruling in the court is nil. The same is true of any evidentiary findings. The case is simply heard de novo - that is, as if the prior proceedings did not even occur. Of course, a court may consider what the hearing officer concluded in a factual sense and how the officer reasoned in a legal sense. But the court can equally disregard all this. This means that the value of the current ruling will only be as good as its innate strength or weakness. If the reasoning and factual findings are compelling, this may well influence a court. Otherwise, it will have no effect whatever or at most a negligible one.
4. What all this means is that this ruling has basically symbolic importance only, representing what state regulators might want as an idealized outcome. Its potential to shape or influence what might ultimately happen in court is, in my view, basically negligible.
5. This doesn't mean that Uber doesn't have a huge battle on its hands, both here and elsewhere. It just means that this ruling sheds little or no light on how it will fare in that battle. You can't predict the outcome of a criminal trial by asking the prosecutor what he thinks. In the same way, you can't predict the outcome here by asking what the Labor Commissioner thinks. In effect, you are getting one side of the case only.
6. The contractor/employee distinction is highly nebulous but turns in the end on whether the purported contractor is actually bearing true entrepreneurial risk in being, supposedly, "in business." There are a number of factors here that do seem to support the idea of true entrepreneurial risk but that just means there are two sides to the argument, not that Uber has the better case.
7. In the end, this will be decided in superior court and then, likely, on appeal to the California courts of appeal beyond that. It will take years to determine. In the meantime, the Uber juggernaut will continue to roll on. So the real question will be: should we as a society welcome disruptive changes that upset our old models or should we use the old regulations to stymie them? Courts are not immune from such considerations and, as I see it, they will apply the legal standards in a way that takes the public policy strongly into account. It will be fascinating to see which way it goes.
That seems like a loaded way of phrasing the question.
Here's another loaded way to ask the question: should we as a society welcome disruptive changes that allow companies to turn defacto employees into at-risk "entrepeneurs", or should we rely on over a century of established practices for protecting employees from being unfairly exploited?
Well that's a hilariously unbiased way of framing it.
I very much enjoyed reading this (longish) piece by Nick Hanauer and David Rolf, "Shared security, shared growth":
Uber's key innovation and disruptive influence is in the customer experience, and I look forward to them finding a way for them to focus on that without exploting technicalities in worker characterization.
Uber started a revolution; but there is no requirement that they survive it.
What do you make of the Berwick Enterprises wrinkle?
Civil disobedience should be the last thing you try, after all the usual channels fail, not something you just leap into because you don't feel like trying the proper channels first.
If the AT&T monopoly had been preserved to the present day, and/or the Carterfone decision had gone the other way, I think we would be seeing a lot of civil disobedience in the form of people connecting unauthorized devices to the network.
I'm sure we'd see civil disobedience of the form you mention if telecoms deregulation hadn't happened. But my point is that it did happen without the need for civil disobedience. Civil disobedience is reasonable and good when you've exhausted all the normal avenues for change and it's not working. But Uber hasn't even tried to get taxi regulations reformed or removed. They've started out by simply ignoring them without ever trying to work within the system.
Of course we've definitely crossed over into matters of opinion now.
All I'm saying here is that if there are problematic regulations you should try to actually get them reformed or removed before you take the step of just outright violating them, because it can and does work sometimes to make that attempt. I'm surprised this is such a controversial opinion.
Edit: it appears that the critical factor they considered was whether or not the driver could have operated their business independently of Uber. They said they could not. They also cited the fact that Uber controls the way payments are collected and other aspects of operations as critical to showing employment. http://www.scribd.com/doc/268946016/Uber-v-Berwick
"Plaintiff's car and her labor were her only assets. Plaintiff's work did not entail any 'managerial' skills that could affect profit or loss. Aside from her car, Plaintiff had no investment in the business. Defendants provided the iPhone application, which was essential to the work. But for Defendant's intellectual property, Plaintiff would not have been able to perform the work."
That's a pretty solid line of reasoning, to be honest. Note that for those unfamiliar with the subtleties of legal jargon, the words "but for" have a specific meaning that relates to causality. In other words that last sentence roughly translates to "if not for the existence of the iPhone app there would be no distinct or independent business here."
In addition, earlier in the ruling they address the fact that mere ownership of a car has historically not been considered the same thing as owning specific "tools" required to perform a job, and it cites the fact that previous precedent for delivery drivers that they are employees, and merely owning the car and paying for gas does not change that.
This is a factor in total revenue but not a factor in marginal profits.
I argue that because I don't get a choice of waiter, their actions have relative little consequence apart from the current transaction - I am not much more likely to come back because I may not get that same waiter - and customers have very limited information. Not so with Uber.
Not true. I know someone who drives for Uber. Just last month, he was suspended because he did not want to drive during low-demand hours (when he literally loses money). Uber drivers are, in fact, required to (a) work when they don't want to and (b) work specific hours.
Incidentally, if it were a 2-party scenario where you required a specific contractor to be available on demand, you would probably be their legal employer. A mandated, regular schedule is indeed one the main tests when distinguishing between an employee and a contractor. I have worked as a software contractor in the US for over almost 15 years and the employers, especially the larger ones with proper HR departments, have been careful to define my work in terms of skills and deliverables, not hours worked.
If I don't weed out people to make the connections as efficient as possible, I'm not doing very well at my job of handling the logistics.
They make some references to Case law for a Yellow taxi case back in 1991. (at least that was my reading!)
But I think the Cali court may have had the right of it by going "that's bullshit."
As one can quickly see that line of argument is exceedingly thin. In order for it to make even a little sense it would have to be rephrased to something more like an argument that Uber's business isn't providing rides, but connecting people who need a ride to an independent business that offers rides to people.
But taking a step back, though it does seem to be a vaguely mitigating factor, maybe, in the abstract, the fact is that this woman wasn't a contractor by the legal definition.
The law doesn't say that employee/employer relationships are determined by what could have happened in some alternate universe. There are full time employee plumbers and carpenters and programmers, and contractor plumbers and carpenters and programmers. They use multi-part tests and precedent to determine which is which.
The determination was that this woman was -- in fact - an employee, it was not a hearing to determine a hypothetical scenario.
Somewhere in California there may be an Uber driver with a fact pattern that makes them a contractor, or not, but it'll take more cases to figure that out.
Of course this is assuming a similar situation with an organization that aggregates customers and connects them to contractors doing the work. The specific example that I saw elsewhere in the thread was the contracted chicken farmers
Yes. infact that happens quite a lot (subject to jurisdiction).
Many builders I know are very concerned about hiring the same contractor too often as they might accidently become an employee (and hence have to pay taxes on them).
These things have nothing to do with my status as an employee or contractor as you'd never guess which one I was based on these facts.
In software, the tools are a big determination, i.e., do you provide your own laptop? You might be a contractor. Are you given benefits such as reasonable vacation days? You might be an employee.
Mis-categorization of employees is a big issue for the IRS and few "contractors" are informed or in a position to threaten to challenge it.
In the software business, I've had an employer who gave me an employment contract and then just decided to write me checks like a contractor each month until I raised a fuss.
I don't know for McDonald's, but for many fast food companies that's absolutely true: the main company (the brand) only sells the franchises, and the franchisers actually own and operate the restaurants. However, the main company holds very tight control over the experience (prices, branding, inspections, menus, ...).
So, if Lyft and Uber and a hypothetical third all had similar business models, and a driver could find people to drive on more than one platform they would be considered independent contractors. I assume Uber wouldn't allow an Uber driver to also be a Lyft driver (citation needed).
This makes sense, and is similar to determining if ANY contractor is an employee. One determinator is if the "contractor" has multiple "clients". If a contractor only ever has one client, and is with that client for an extended time they are more likely to be found to be a full time employee instead.
Others factors generally include things like how you get paid (do you bill the client, or are you on payroll?) or the nature of your work (projects and deliverables, or day-to-day operations, etc).
Of course many of these things favour classifying Uber drivers as contractors, but there's enough of a gray zone for a court to rule they are full-time employees.
I think providing a service to connect buyers and sellers should be able to be distinct from having employees.
It is, but the court decided that Uber exercised too much control over the conditions of the work to just be connecting buyers and sellers.
The former is saying a business cannot exist without employees performing critical functions (I'm not saying that this is de facto truth, but just phrasing the argument).
The latter is saying that without a business, you don't have employees/contractors, which makes sense, but seems obvious and inconsequential.
A ride-sharer / driver needs the platform and the platform needs the driver, fundamentally. It's not like most contracting where it's not the end of the world if all the contracts end.
Additionally, McDonald's (or similar) locations are independently managed to a certain extent, that's why ads always say "at participating locations".
The ruling points out that this isn't as important as it appears. The example given in the ruling is that of a pizza delivery person. A delivery person is considered an employee of a pizzeria even if they are required to provide their own car and pay for their own gas and insurance.
Also, Uber provides drivers with an iPhone (though they don't have to use it).
I think there's a very good argument for Uber having to treat the drivers as employees. They are dependent on Uber and Uber sets the amount they will earn. They would more likely be contractors if the drivers set their own rates and Uber would choose who they wanted to drive. Doesn't Uber also try to restrict who they can drive for too? Additionally, Uber's business relies entirely on the labor of the drivers. Uber also supervises the employees in-part by the rating system.
In terms of buying their own equipment - this is not an uncommon thing in many trades. Mechanics have to buy their own tools. Many machinists buy their own tools.
Truth is there is a lot of gray area here but I can see interpretation both ways. I do hope the drivers in California take this opportunity to organize as quickly as possible and begin collective bargaining with Uber.
I'd set Uber's value at less than one billion if this happened.
I think that would be a bit of an overreaction.
The ruling is embedded on the page.
The case law they cite:
"In addition, even though there is an absence of control over the details, an employer-employee relationship will be found if the [Defendants] retain control over the operation as a whole, the worker's duties are an integral part of the operation, and the nature of the work makes detailed control unnecessary."