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Businesses The Courts Transportation United States

Uber Wins Key Ruling In Its Fight Against Treating Drivers As Employees (arstechnica.com) 177

Posted by BeauHD from the regulated-relationships dept.
A federal appeals court ruled on Tuesday that drivers "seeking to be classified as employees rather than independent contractors must arbitrate their claims individually, and not pursue class-action lawsuits," reports Reuters. Ars Technica explains the significance of this ruling: Employees are guaranteed to earn federal minimum wage and are entitled to overtime pay if they work more than 40 hours per week. Uber employees, in contrast, are paid by the ride and might earn much less than minimum wage if they drive at a slow time of day. California law also gives employees the right to be reimbursed for expenses they incur on the job, which would be significant for Uber drivers who otherwise are responsible for gas, maintenance, insurance, and other expenses of operating an Uber vehicle.

Hence, the question of whether Uber drivers are employees or independent contractors is a big and important one. It's also a question that isn't addressed at all in Tuesday's ruling, as the courts never get to the substance of the plaintiffs' arguments about employment law. Instead, a three-judge panel of the 9th Circuit court ruled that the drivers signed away their rights to sue in court when they signed up to be Uber drivers. Uber's agreement with drivers requires that this kind of dispute be handled by private arbitration rather than by a lawsuit in the public courts. The court cited a Supreme Court ruling handed down in May that held that federal labor law did not preempt arbitration agreements. [...] the decision means that each driver's case must be fought on an individual, case-by-case basis. Class-action lawsuits in the federal courts allow plaintiffs to effectively pool their resources. [...] But under arbitration, each driver's case will be considered individually. Most won't have the resources to afford top-tier legal representation, and drivers won't have the inherent leverage that comes from being able to bargain as a group.
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Uber Wins Key Ruling In Its Fight Against Treating Drivers As Employees More

Uber Wins Key Ruling In Its Fight Against Treating Drivers As Employees

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  • US courts (Score:1)

    by Anonymous Coward

    Once again the yanks will lube up and bend over for corporations.

    • Re: (Score:1)

      by bluelip ( 123578 )

      The drivers are not employees. Why treat them as such? Do you provide health insurance and benefits for the plumber you call? The drivers are, at most, contractors.

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        My plumber doesn't work 40+ hours per week for me week after week. I also generally don't have my plumber sign a contract before beginning to work for me. I don't set my plumber's rates. The plumber doesn't have to live by my code of conduct subject to suspension or termination.

        I don't have a formal code of conduct for my plumber, which limits what plumbing jobs my plumber shall and shall not take, what he is allowed to say when speaking to his plumbing clients, disallowing him from contacting any of us aft

        • My plumber doesn't work 40+ hours per week for me week after week.

          More than 80% of Uber drivers are part timers. More than half drive less than 10 hours per week.

          I also generally don't have my plumber sign a contract before beginning to work for me.

          In most states, a licensed plumber is required to have you sign a work order that contains a list of what is to be done and an estimate of the cost. It is a contract.

          I don't set my plumber's rates.

          Then you are likely paying more than you need to. Everything is negotiable.

          • "I also generally don't have my plumber sign a contract before beginning to work for me."

            In most states, a licensed plumber is required to have you sign a work order that contains a list of what is to be done and an estimate of the cost. It is a contract.

            yes. Peculiarly enough though, the contract virtually always protects the contractor to the disadvantage of the home or business owner.

            • "I also generally don't have my plumber sign a contract before beginning to work for me."

              In most states, a licensed plumber is required to have you sign a work order that contains a list of what is to be done and an estimate of the cost. It is a contract.

              yes. Peculiarly enough though, the contract virtually always protects the contractor to the disadvantage of the home or business owner.

              This, for the love of FSM.

              Uber wants to fashion itself as a contract facilitator between the contractor and the contractee. But it is Uber, not the driver, who specifies the terms of the contract. IMHO, that makes Uber an employer, and the drivers employees, not contractors.

              • But it is Uber, not the driver, who specifies the terms of the contract. IMHO, that makes Uber an employer, and the drivers employees, not contractors.

                That is an absurd criterium. Nearly all contracts are written by one party and accepted by the other. If that makes it "not a contract", then there would be no contractors.

                • You are being deliberately obtuse.

                  Uber is the party writing the contract, so they are the actual contractor. The driver is, in this case, either just an employee of Uber or their subcontractor. Uber argues that the latter is the case, but it is not true since Uber is - again - the party writing the contract. Subcontractors don't work that way.

              • Re: (Score:1)

                by TechNit ( 448230 )

                This!!

      • Bad example. That is more like putting the passenger in the role of employer, as opposed to Uber the company.

      • It's a common tax question of when is someone an employee and when are they a contractor. This is well settled. THere are puiblished guideline. You could look them up since you don't know them.

        But a rule of thumb is a contractor provides the tools of their trade, and gets paid by the task not the hour or the mile.

        For example a house cleaner is Usually not a maid. A maid uses the vaccuum provided by the household, the house cleaner brings one.

        Other signs are things like paying your own Social security an

  • Great (Score:2, Insightful)

    by Anonymous Coward

    So, Uber is off the hook simply because they have endless financial resources. Way to go, American legal system. I hope dearly that the EU regulates Silicon Valley so far into the ground that they will have no option but to relent here as well.

    • So someone should start a GoFundMe to finance a few individual lawsuits. I bet a lot of people would kick in $10-$20.

    • Re: (Score:1)

      by bluelip ( 123578 )

      No, it's because the drivers are not employees. If anything, they're a contractor.

    • So, Uber is off the hook simply because lawful contracts you sign are still legally binding in the US, whodathunk?

      FTFY

      Strat

      • Re: (Score:3)

        by Cyberax ( 705495 )
        You missed the part where the contract prohibits you from going to court. The case was not decided on the merits of the case, the court simply refused to hear it.

        As for arbitration, it's entirely legal to:
        1) Bribe the arbiter.
        2) Allow arbiter to have direct conflicts of interests.
        3) Allow arbiter to decide the case by a coin toss.

        Results of arbitration are secret and you have no recourse or appeals.

        • You missed the part where the contract prohibits you from going to court.

          No I did not "miss" anything, it's a lawful contract. That's the point.

          Nobody forced drivers to sign the contract. There was no duress, threats, etc to sign up. They could choose to drive for another service or look for work in a totally different business.

          What if the lawn service you hire suddenly decides that you are an employer and owe all of the crew retirement benefits, health insurance, etc when you only signed a contract with them to mow your small yard twice a month?

          The 9th Circus was surprisingly a

          • Re: (Score:2)

            by uncqual ( 836337 )

            The 9th Circus was surprisingly and astonishingly correct here (mark it on the calendar!).

            I've not read the ruling, but from the summary it sounds like their hands were tied by a recent Supreme Court ruling. Give them a bit of time, they will figure out a way around that ruling and eventually decide such contracts are not lawful.

          • Comment removed based on user account deletion

          • Re: (Score:2)

            by Cyberax ( 705495 )
            The thing is, such contracts should not be legal. They clearly contradict the plain text of the Constitution.

            • The thing is, such contracts should not be legal. They clearly contradict the plain text of the Constitution.

              Which specific part?

              I don't remember a Constitutional clause forbidding private parties from engaging in arbitration or in contracts including an arbitration clause.

              Besides, isn't the Left always telling us, in the case of Google/YT/FB censorship, that Constitutional limitations and restrictions only apply to the government and not private corporations?

              Strat

              • Re: (Score:2)

                by Cyberax ( 705495 )

                The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behavior, and shall, at stated Times, receive for their Services a Compensation which shall not be diminished during their Continuance in Office.

                It's pretty clear that mandatory arbitration clauses in shrink-wrap contracts or in cases where one party has way more bargaining power must be illegal. They undermine the very basic foundations of the civil society, existing since the Magna Carta. If this is not checked, there might not be the US in a generation. And I'm not kidding at all.

                Besides, isn't the Left always telling us, in the case of Google/YT/FB censorship, that Constitutional limitations and restrictions only apply to the government and not private corporations?

                You are not forced to use Google and there's no binding agreement between you or Google.

                • The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behavior, and shall, at stated Times, receive for their Services a Compensation which shall not be diminished during their Continuance in Office.

                  It's pretty clear that mandatory arbitration clauses in shrink-wrap contracts or in cases where one party has

                  • Re: (Score:2)

                    by Cyberax ( 705495 )

                    You are not forced to use or drive for Uber/Lyft and there's no binding agreement between drivers and Uber/Lyft until drivers knowingly and voluntarily enter into such an agreement. Drive for another ride-share if the terms are not to your liking.

                    Try to find a cell phone contract without an arbitration clause. Or a bank contract. Or mortgage contract. Or actually any employment contract (90% of non-union employment contracts have forced arbitration).

                    At some point "voluntarily" simply doesn't cut it.

  • Hmmm, verry interesting (Score:1)

    by Anonymous Coward

    Fuck it, unionize.

    Local 420 uber/lyft-driver's union.

    make them subject to the laws/fee's that normal cabbies have to abide by,

    And ya know wut, make'em pay for rights for the air-ports too. they wanna play like the big boys, make'em pay like tha big boys

    BAM! you have now revolutionized the "CAB" industry while removing the single most parasitic element of the business..
    maintaining the vehicles..

    Whey to go, fucking wonderful..

  • so any job can now use arbitration minimum wage (Score:4, Insightful)

    by Joe_Dragon ( 2206452 ) on Tuesday September 25, 2018 @06:00PM (#57376010)

    so any job can now use arbitration get out of
    minimum wage
    workers comp
    sexual harassment
    overtime
    etc.

    • Re: (Score:2)

      by MAXOMENOS ( 9802 )
      If only there were some sort of, say, club, that employees could join, where they come up with a common strategy to fight employer abuses.
      • If only those clubs hadn't discredited themselves by being corrupt and an arm of the Democrats, they might have some clout. But when Democrats passed NAFTA, that was the death knell of the American working class. Who cares, really...fuck the deplorables, remember?

    • Lets sort one thing out. Sexual harassment is not included in any job... or shouldn't be. That has nothing to do if a person is an employee or a contractor.

      Ever done any contract work? 1099 work? You get what you're paid. It's one reason why people see bigger dollars, but they have to pay all the taxes normally taken out of a employees paycheck.

      Also, contract work is done by the job, not the hour. So plan accordingly. Thus a contract. Do stuff, get paid on agreed price.

      For example, real estate agent

      • Quite a lot of contract jobs are paid by the hour though, especially when the job to do is not clear cut with an ending condition. They will essentially do identical jobs to full employees, fixing bugs, adding features, writing docs, etc. They are hired because they can get around hiring freezes or because you couldn't find anyone else suitable to fill the job reqs.

    • The courts here didn't decide anything of the above in this case, instead they ruled that the Uber "employees" signed away their rights when they applied for the jobs.

      So the lesson here is do not sign away your rights when you take a job. Especially don't sell your soul for a low paying job.

      Basically the courts have decided that those stupid agreements you sign when taking a job are valid, which is still highy pro-corporate.

    • Re: (Score:2)

      by Koby77 ( 992785 )
      Potentially they could, but then as a contractor they could have job freedoms, such as making their own schedule, to which most employers would balk at any price.
    • Nah, just Commifornia companies which act across state lines thanks to the wonder of technology and bring money into the parasitic state known as Commifornia.
    • if you don't like it you're gonna have to vote pro-consumer, anti-corporate people in like Bernie Sanders, Liz Warren and Alexandria Ocasio Cortez. Start here [justicedemocrats.com]. It's a non-corporate PAC that makes refusing corporate PAC money a condition of membership. I'm not sure if there's a Republican or Libertarian equivalent, but if anyone's got one I'm all ears.

  • and if the IRS rules them as Employees then will t (Score:4, Insightful)

    by Joe_Dragon ( 2206452 ) on Tuesday September 25, 2018 @06:03PM (#57376024)

    and if the IRS rules them as Employees then will they fall into the black hole of having both the down sides with none of the upsides?

  • I used to Tip Uber drivers (Score:5, Interesting)

    by commodore64_love ( 1445365 ) on Tuesday September 25, 2018 @06:08PM (#57376048) Journal

    (1) Their "real" income after expenses puts them below minimum wage ($9.20 an hour). I felt sorry for them. They could work at a restaurant or store and earn better income.

    (2) I say "used to" because one of those drivers I gave a generous tip, then proceeded to charge me for HIS drive from Santa Ana to Pasadena. I figured it was a mistake. BUT THEN Uber told me, "The driver says he took your girlfriend home, so that was the cause for the extra charge. No refund."

    Problem: No girlfriend. I lost $120, and immediately erased Uber's app since that's not the kind of company I want to do business with.

    • I believe your story. Because drivers can just randomly charge you.

      • You know ten years ago the advice given to kids used to be "don't trust anyone on the internet" and "don't get into cars with strangers". Today those same kids are now contacting strangers on the internet so they can get into their cars.

      • Re:I used to Tip Uber drivers (Score:5, Informative)

        by commodore64_love ( 1445365 ) on Tuesday September 25, 2018 @08:38PM (#57376636) Journal

        The driver CAN charge you extra if there's a "hole" in the Uber app's design. When I checked my app the next day, it said the Driver took me from Garden Grove to Santa Ana, and then from Santa Ana to Pasadena.

        The first part was a legitimate trip. The second part was the driver illegally extending the trip beyond its original destination, and charging me for it ($120 extra).

        - Now that was 2015... perhaps this flaw has been closed, but it definitely existed back then, and since Uber refused to refund me, I refused to continue my business with them.

        • and since Uber refused to refund me, I refused to continue my business with them.

          And you didn't call the credit card company and get a chargeback because....?

        • Re:I used to Tip Uber drivers (Score:5, Interesting)

          by Mr_Silver ( 213637 ) on Wednesday September 26, 2018 @02:36AM (#57377562)

          The first part was a legitimate trip. The second part was the driver illegally extending the trip beyond its original destination, and charging me for it ($120 extra).

          Funnily enough Uber tried to fix this issue by continuing to track the riders phone whilst the app was closed.

          The theory being that if the rider and the driver parted ways, yet the driver reported taking the rider somewhere else, then Uber could easily verify if driver was trying to defraud the system.

          Unfortunately people didn't like being tracked after their ride had finished and there was uproar. Apple's privacy change put the final nail in the coffin for it.

    • Re: (Score:2)

      by alexo ( 9335 )

      Problem: No girlfriend.

      I feel your pain, dude.

    • This story doesn't seem consistent.
      Uber didn't introduce tipping until about a year ago. You can't rate or tip drivers until after the driver swipes to mark the trip as complete, after which the driver can't re-start the trip. So, you would have seen that the trip was still active on your phone. In good traffic, you'd have had an hour to notice this.

      • > Uber didn't introduce tipping until about a year ago.

        Really dude? I know most of us use credit or debit cards, but surely you've heard of CASH tips. I'd hand my Uber drivers an extra $5 bill.

        > you would have seen that the trip was still active on your phone.

        Nah I went straight to bed, and did not check my phone until the next morning, which is when I saw my trip was listed as Garden Grove to Santa Ana (legit) and then Pasadena (not legit).

        • Nah I went straight to bed, and did not check my phone until the next morning, which is when I saw my trip was listed as Garden Grove to Santa Ana (legit) and then Pasadena (not legit).

          And the next day you called your credit card issuer and disputed the charge, right?

    • Easy Solution (Score:2, Interesting)

      by rsilvergun ( 571051 )
      Vote for pro-worker, pro-consumer, anti-corporate candidates. I said this elsewhere in this thread, but folks like Bernie Sanders, Liz Warren, Alexandria Ocasio Cortez and the entire lot of the Justice Democrats. Look for candidates who refuse corporate PAC money. And remind your friends and family to do the same. That'll do more to help Uber drivers than the occasional $10 tip.

    • Re: (Score:3)

      by ljw1004 ( 764174 )

      one of those drivers I gave a generous tip, then proceeded to charge me for HIS drive from Santa Ana to Pasadena. I figured it was a mistake. BUT THEN Uber told me, "The driver says he took your girlfriend home, so that was the cause for the extra charge. No refund.

      I've had similar experiences - shitty drivers, followed by shitty follow-up from Uber customer service.

      Case 1: arrived back to Seatac with just enough time to drive home to say goodnight to my toddlers. I requested a single-passenger (i.e. non-pool) Uber. For some reason it was taking ages in the "cellphone parking lot". Eventually it arrived 10 minutes later than it should. Someone else hopped in the car as well who asked the driver "are you my Lyft driver?" The driver said yes. I got in too. The driver dr

  • "Inequality of bargaining power" (Score:5, Insightful)

    by Tablizer ( 95088 ) on Tuesday September 25, 2018 @06:33PM (#57376178) Journal

    the 9th Circuit court ruled that the drivers signed away their rights to sue in court when they signed up to be Uber drivers.

    Such clauses should be illegal. People should have the right to sue when the want. Poor and under-employed people, especially, don't have the negotiating power to pick and choose which clauses they like in such contracts. It's not a deli: it's get a paycheck or don't get a paycheck. This lopsidedness is sometimes called "Inequality of bargaining power".

    Some argue it would flood the courts, but the courts can be streamlined to have an arbitration-like stage for smaller claims where the arbiter tries to work out a mutual agreement without anybody having to visit a courtroom. If either party doesn't agree, then it goes up to the formal court. The arbiter wouldn't be selected by nor hired by the corporation.

    • Re: (Score:2)

      by JBMcB ( 73720 )

      Some argue it would flood the courts, but the courts can be streamlined to have an arbitration-like stage for smaller claims where the arbiter tries to work out a mutual agreement without anybody having to visit a courtroom.

      You'll have every trial lawyer association going against that reform. There's a reason going to court for anything is *very* expensive. There is a very powerful lobbying group with close ties to the government who keep it that way, and it won't change.

    • Inequality is if you have first invested something and the employer has a monopoly. So sports players have a union because the players have devoted a lot of time specializing in one job and there is often only one league they can work for. Teachers have unions, you have to train to be a teacher and there is often only a limited number of employers in your area. A mine in a remote location should have a union, since it takes an investment to move to the area the mine is in. Sometimes you need a union to
    • Comment removed based on user account deletion

  • This is how it all begins....

  • They are contractors - degree of control (Score:3)

    by FeelGood314 ( 2516288 ) on Tuesday September 25, 2018 @09:29PM (#57376822)
    Uber drivers - provide all their own tools (the car), work when they want for as long as they want, choose the rides they pick up, they can choose how they perform the job (they have some choice in the route to take). They can even work for competitors at the same time. Contractor vs Employee is about the workers level of control. If you show up at an office at a specific time, work using a company computer, do the tasks they assign and can't work for a competitor then you are definitely an employee. Uber drivers are further from being an employee than any of the governments "contractors".
  • stop working for them.

  • Comment removed (Score:4, Insightful)

    by account_deleted ( 4530225 ) on Tuesday September 25, 2018 @11:30PM (#57377172)
    Comment removed based on user account deletion

  • They do identical work under identical conditions. This makes as much sense as demanding a unique class definition for each instance in Java. But I've stopped expecting the world to be rational. Imagining it to be filled with Golgafrinchams makes everything make much more sense.

  • - might earn much less than minimum wage if they drive at a slow time of day.

    When I see demands for the drivers to at least make minimum wage, I've wondered... does this mean while they are driving? Or as long as they are signed in to the app? Would they still get paid by the hour if they refuse nearby ride requests? Or would the hour pay stop the instant they refuse/ignore a nearby request? I don't mean this to be in opposition to the cases or drivers, it's just something I've legitimately wondered every time it came up.

    • well some drivers don't like some trips that cost them more then they make. Also what about an long trip??? where the have a lot of time just coming back?
      Waiting at the airport?
      Long return to the airport?
      Return trip after last ride of the day?

      • What I'm questioning is more of, what if the driver just sits in a parking lot and declines rides for 1-2 hours. Are they saying he should get 2 hours pay for that? Or would the "clock stop" at him declining 1-2 in a row? I'm legitimately curious what the fix they want is and how exactly it would work.

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