Summary: Uber’s new struggle of classifying their drivers as employees that are entitled to the same benefits as normal employees has begun.
Uber, a ride-hailing service, has been running into a lot of legal walls lately, especially in the United States. Their latest legal problem defines a driver as an employee, not contractor. A ruling by the California Labor Commission says that a San Francisco-based driver is an employee.
The court backed their decision up by stating that Uber is “involved in every aspect of the operation”. Uber believes their drivers are contractors because the only thing they share is a platform for the service to be filled. Making their drivers employees will require Uber to pay extra to cover Social Security, unemployment insurance, and workers compensation.
Uber monitors their drivers by controlling the tools they use and watching their approval ratings. They stop system access to drivers that have ratings below a 4.6. The Commission sees these actions as more than just sharing a system. Barbara Ann Berwick brought the claim to the Commission last September after being a driver for two months. She was awarded around $4,000 in expenses by the labor commission. Uber appealed that ruling, bringing them to this latest ruling.
Uber has been on the losing side of several rulings calling drivers employees instead of contractors. A state agency in Florida ruled earlier this year that drivers for Uber are more than just contractors. This ruling will likely affect Uber’s current valuation at $40 billion and could affect other companies that use people to provide services such as rides, cleaning, etc.
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Source: http://www.huffingtonpost.com/2015/06/17/uber-drivers-lawsuit_n_7603630.html?ir=Technology
Photo: cato.org