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California Labor Commission Rules Uber Driver Is An Employee

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Fortunately, this latest legal blog is likely not a trend, but still bears watching. The State of California has ruled that an Uber driver is an employee. Whether this will serve as precedent elsewhere remains to be seen.

For those of you not familiar with the company, Uber offers this fantastic service that was started up in 2009 but really hit its stride a couple of years ago. Through the use of an app on a mobile phone or smart device, consumers can schedule a driver to pick them up and transport them to a destination. It’s fast, efficient and cheaper than taxicabs. In short, the cab companies hate them.

However, unlike traditional taxicabs, Uber drivers are classified by the company as independent contractors and not employees. Uber maintains that it is not a transportation company, but rather a software technology company that provides a platform to consumers for a service.

Disgruntled drivers in California have filed several lawsuits alleging they should be considered employees, and as such, are entitled to benefits and other protections under federal and state laws.

In its infinite wisdom, however, the California Labor Commission has found that a driver (but not all drivers) is an employee. The Commission based its decision on a number of factors:

  • Uber retained control of the operation as a whole, and was involved in every aspect of the operation;
  • Uber has a vetting process for its prospective drivers
  • Uber monitors drivers’ approval ratings, and if ratings dip below a certain level, it terminates the agreement with the driver;
  • Uber drivers must pass background checks;
  • Uber controls the vehicles used by drivers and dictates what cars may be used;
  • Uber uses its own internal discretion if a cancellation fee will be paid to drivers; and
  • While Uber allows driver to hire others, only Uber-approved drivers may use its software.

The Commission reached its decision despite the fact that Uber drivers use their own vehicles, pay for their own gas, set their own hours, and are free to work for anyone.

Generally, we recommend takeaways or cautionary measures for our contractor members, but not here…yet. At this point we will hope for an anomaly, but keep you posted on any future developments in California, or any other states.

Hilary Atkins

Posted In: Legal

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