A ruling by the California Labor Commissioner has declared an Uber driver working in California is an employee of the ride-sharing service, not a contractor.
Uber Drivers are Employees
According to the June 3 ruling, since the ride-hailing company Uber is “involved in every aspect of the operations,” the driver and plaintiff in the case, Barbara Berwick, did not have enough freedom within the workplace to be considered an independent contractor. A labor commissioner ruled Uber owes Berwick $4,152.20 in business expenses for the two months the company employed her as a driver last year. Uber has appealed the ruling in San Francisco Superior Court.
But this is not the only challenge Uber is facing as the result of its contractor-based business model. The company maintains it is simply a matchmaker between riders and drivers and not a transportation service. Because of this business model, it contends that because drivers are independent contractors, Uber is not responsible for any costs drivers incur while working for them. That means the company does not have to pay for gas, car maintenance, and employee benefits like health insurance and vacation time.
The commission wrote that Uber holds itself “as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation.” The commission went on to say that because Uber has far too much control over the everyday details of a driver’s job, drivers cannot be considered independent contractors, they said.
As the commission listed, Uber has strict regulations when it comes to the service it offers. The company sets fare prices, discourages its drivers from taking tips, vets every driver, fires drivers that receive an overall rating of below around 4.6 out of 5 stars, and also requires its cars meet specific requirements. These regulations were enough to convince the commission that Berwick was an employee of Uber.
Responding to the ruling, an Uber spokewsoman emphasized the commission’s ruling is non-binding, and thus later decisions are not required to agree with it. In her statement she also wrote the ruling only applies to Berwick and that drivers are allowed to also work for other similar companies like the ride-sharing service Lyft.
“It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control,” she said. “The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.”
She also took the time to emphasize that in a 2012 ruling, the same commission concluded a driver was a contractor, not an employee.
Broad, but Actually Limited Ruling
According to start-up lawyer George Grellas, the commission’s decision sounds broad, but is limited in scope and is “such a low-level process” right now. Grellas says the ruling is more administrative than judicial, and other courts are under no obligation to follow the decision. Uber has appealed the decision, which will move the case to the San Francisco Superior Court. If the case moves from there to the California Courts of Appeal, Grellas says, that could mean a more binding precedent.
“It’s a throwaway type forum,” Grellas said. “Once it’s appealed, which of course Uber has already done, then the ruling itself has zero significant on even future proceedings in that same matter. Maybe it’ll have significance in some kind of social way, like people around the nation will see it. But legally it’s basically a ruling that is disposable, so to speak.”
Deferring to Lower Rulings
But for other similar cases to Berwicks, this case could mean a great deal. Shannon Liss-Riordan, an attorney currently suing both Uber and Lyft on behalf of drivers seeking to be employees says higher courts sometimes defer to decisions made by government agencies because they are the ones enforcing the law.
“It could be very helpful for our case,” she said. “The specific ruling pertained to one driver but the reasoning that the labor commissioner used was more broadly applicable.”
While the ruling is just about one driver, this is not the first time a government agency has declared Uber drivers as employees. In a similar case in Florida, an Uber driver filed for unemployment benefits after he was deactivated. In May the Florida Department of Economic Opportunity ruled he was an employee and thus should have been able to receive unemployment benefits. In another case that is seeking class-action status, a judge denied Uber’s motion to have its drivers declared as contractors. The case has been sent to a jury.
These types have cases have also hit Uber’s ride-sharing competitor Lyft. A court has has denied both Uber’s and Lyft’s attempts to require that drivers to resolve cases in closed arbitration.
What Do Drivers Want?
But being called employees might not be what drivers want, especially if they only work a few hours a week. A recent survey of done by SherpaShare of 201 on-demand workers for companies like Uber, Lyft and Postmates, found two-thirds of workers wanted to be classified as independent contractors. The survey done by the driver analytics tool was mostly of Uber and Lyft drivers. They made up 86% of respondents.
Many of the respondents to the survey cited Uber’s and Lyft’s strict rules regulating drivers as their reason for wanting to be called contractors. The companies both require drivers to accept rides. If they don’t accept 90% of rides they can be fired. However, drivers who consider themselves contractors said they valued the fact that they are able set their own hours above any other kind of benefit they might receive as the result of being called employees.
“Both companies (Lyft and Uber) use deactivation threats to control drivers,” one survey respondent said. Others responded they wouldn’t want to work for the companies if they were called employees and thus had schedules set by the companies. Bottom line, as one respondent wrote, “I drive when I want, for as long as I want.”
Harassment in the Workplace
A place of employment should not be a place of harassment or a reason for stress due to harassment. If you have been the victim of harassment or undue stress caused by harassment you should know there are legal ways to prevent these kinds of problems from occurring. You are also legally allowed to seek compensation. An employment lawyer handles many types of employment law claims, including the following:
- Wrongful termination: Employees who believe they were let go from their jobs based on a discriminatory action can take legal action against their employers. Discriminatory actions can be based upon a person’s gender, sexual orientation, race, disability, medical condition (including pregnancy), age, national origin or religion. If you feel you have been discriminated against because of these reasons an employment lawyer like the ones at RHM LAW LLP can investigate your claim and effectively represent your rights and interests.
- Wage and hour litigation: Employees can pursue claims for unpaid overtime, unpaid meal and rest breaks, minimum wage pay and other claims related to wages and hours worked. RHM LAW LLP is familiar with the specific rules of the Fair Labor Standards Act (FLSA) along with federal and state wage and hour laws.
Meeting with an Employment Law Attorney
If you feel you have a case and that you have been discriminated against or have been unfairly paid, you should schedule a meeting with an employment lawyer. Before you meet with a lawyer, you’ll want to make sure that you are prepared. Here are some things you’ll want to bring to the meeting:
- Any and all papers from your personnel file. These may or may not be available to you without going to court and getting an order. If you’re an employer, you’ll want to bring the personnel file and other information relevant to the employee’s situation.
- The personnel manual, if one exists.
- Copies of all correspondence and notices relating to your claim.
- Dates can be critical, so you’ll want to record them. Get a calendar and record all the dates of when things happened, when you received any notices or other documents. The calendar can be used as a reference when you meet with your attorney.
- Have names, addresses, and telephone numbers for everyone you have talked with. That includes the names of any representatives at government agencies.
- Round up your insurance policies. A lawyer will want to see if there is any chance of coverage for your claims.
An employment lawyer will review the merits of your complaint and advise you on the next steps in pursuing legal action. That could either be negotiating a settlement or pursuing further litigation in court. The Los Angeles employment law attorneys at RHM LAW LLP can help protect you against further employment dispute claims.
Working with an Employment Law Attorney
There are rules and regulations for your safety and well-being while at work. That means safety from discrimination and unfair treatment. If you feel you have been treated unfairly by an employer you should immediately contact an employment law attorney. Federal and state employment laws provide directives for the workplace that protect employees who have experienced discrimination and other adverse actions. Whether you are an employee who has been wrongfully terminated or are an employer requiring guidance with a legal matter, our Los Angeles employment law attorneys can assist you.