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The Courts Businesses Transportation

Limo Firm To Judge: Tell Us Whether Uber Drivers Are Employees (arstechnica.com) 102

Posted by BeauHD from the million-dollar-questions dept.
An anonymous reader quotes a report from Ars Technica: Lawyers representing a Southern California limousine company that sued Uber last month over state unfair competition allegations have now filed a motion for partial summary judgement. If the filing is granted by the judge, the motion would substantially streamline the case and answer the vexing question: are Uber drivers employees or not? The proposed class-action lawsuit, known as Diva Limousine v. Uber, relies on a recently decided California Supreme Court decision that makes it more difficult for companies to unilaterally declare their workers as contractors, which effectively deprives them of benefits that they would otherwise receive as employees.

In the California Supreme Court case, known as Dynamex, that court came up with a three-part test, known as the ABC test, to figure out whether companies can assert contractor status or not: "(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, (B) that the worker performs work that is outside the usual course of the hiring entity's business, and (C) that the worker is customarily engaged in an independently established trade, occupation, or business, the worker should be considered an employee and the hiring business an employer under the suffer or permit to work standard in wage orders." "The standard for summary judgement is that there is no triable issue of material facts. That seems to be the case here," says Professor Veena Dubal of the University of California, Hastings, which is just blocks from Uber's headquarters in San Francisco.

"Under Dynamex, workers are likely employees for purposes of minimum wage and overtime if they perform work that is within the usual course of the hiring entity's business. Uber drivers provide rides, and Uber is a transportation company that facilitates the provision of those rides. I have a hard time imagining how Uber can argue that there is a triable issue of fact here, although I am confident that they will argue that they are a software company. They have lost that argument in courts across the world."
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Limo Firm To Judge: Tell Us Whether Uber Drivers Are Employees More

Limo Firm To Judge: Tell Us Whether Uber Drivers Are Employees

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  • Try asking half the "contractors" in IT whether they have to show up at work at 9am or not. Most of them will quite obviously begin to cycle through the stages of grief when you point this out.

    • Re: (Score:3, Interesting)

      by ShanghaiBill ( 739463 )

      Well, it has been almost a week since we last rehashed this topic, so let's do a review. There is no ONE criterium that makes someone a contractor or employee. The IRS has a 20 point checklist (listed below). Uber meets some of the criteria, and doesn't meet others. But it is a checklist, not a scorecard. So does that mean their drivers are employees? Answer: Maybe.

      Also, it is not necessarily "better" to be an employee ... or a contractor. Employees tend to get more benefits in addition to their pay,

      • Re: (Score:3)

        by DRJlaw ( 946416 )

        Well, it has been almost a week since we last rehashed this topic, so let's do a review. There is no ONE criterium that makes someone a contractor or employee. The IRS has a 20 point checklist (listed below). Uber meets some of the criteria, and doesn't meet others. But it is a checklist, not a scorecard. So does that mean their drivers are employees? Answer: Maybe.

        Since this is a California labor law case, and labor law outside of civil rights and unionization issues still remains a matter of state law, th

        • Re: (Score:2)

          by Bert64 ( 520050 )

          A: no contractor is free from the control and direction of the contracting entity, the whole point is that as a contractor you are bound by the terms of the contract. on the other hand uber drivers have a high degree of flexibility as to when, where and for how many hours they work, a benefit most employees will not have.

          B: many uber drivers also operate independently of uber and are free to do so, where uber has competitors a lot of drivers are signed up to the competing services as well, plus many also ta

          • Re: (Score:2)

            by DRJlaw ( 946416 )

            A: no contractor is free from the control and direction of the contracting entity, the whole point is that as a contractor you are bound by the terms of the contract.

            "in connection with the performance of the work." You contract for results, not for how the work is done. If you want to control how the work is done, then you hire an employee.

            B: many uber drivers also operate independently of uber and are free to do so, where uber has competitors a lot of drivers are signed up to the competing services as w

          • A. You don't understand the 'A' criteria. This means that the contractor is able to provide the objective output without control of the contracting entity. In simplistic (and admittedly ineffective) terminology, this means no micromanagement. If you're contracted to provide a widget, you turn in a widget in exchange for your fee. In this case, you get the person from point to point. Part of the question is where the objective turns into control. Is dictating the application the driver uses? The vehicle char

      • Re: (Score:1)

        by Anonymous Coward

        The reason you have the system of medallions in NYC, for example, is to ensure a certain amount of order.

        The cab drivers can make a living, the cab companies harbor the liability and ensure safe drivers, you don't spam the streets with tons of cars, and supply is in balance with demand. If you end up with a downturn, drivers are laid off instead of everyone's pay dropping to unsustainable levels and the system collapsing. Any Schmuck with a drivers license can drive people around, and we've come to a real

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        Rather than try to determine by some complex set of criteria if they are employees, why not decide if she think they should be or not and then make any adjustments to the law that are necessary?

    • and the best part is you've got an 18 month shelf life because that's as far as they can employ you as a "contractor" before somebody notices they're dodging taxes.

      What I don't get is all the folks who don't want to do anything about it. If you're rich, yeah, I get that. You want to go on abusing people. But I know so many folks who won't touch the system because they're convinced that if they do the government'll go all Stalin on them. Seriously, first we have adequate worker protections and next thing

    • Re: (Score:1)

      by Anonymous Coward

      Try asking half the "contractors" in IT whether they have to show up at work at 9am or not. Most of them will quite obviously begin to cycle through the stages of grief when you point this out.

      I used to be a contract worker before I got full time at a fortune 500. (They got rid of the contract workers, so you had to try for full time.) The only real differences were this:

      1. Contract pay was better.
      2. No sick time or vacation pay, but you didn't care. See (1). You could pretty much take off when you needed to with some reasonable notice and making sure you were caught up.
      3. No performance reviews.

      I find the current republican party to have almost no redeeming values, and their head to be clear

  • If it quacks like a duck... (Score:1)

    by Anonymous Coward

    Of course Uber drivers are employees

    The driver's fares are set by Uber
    Driver's have to abide by Uber's code of conduct
    Uber terminates drivers who break the code of conduct
    Uber sets a minimum rating that the driver must maintain
    Uber provides the clients (riders) for the driver
    The driver must pick up any rider assigned to them
    The driver must drive the route the Uber app plots
    Uber sends recommendations for improvement to the driver

    Doesn't sound like a freelancer to me.

    • Re: (Score:2, Insightful)

      by Faldgan ( 13738 )

      I'm not sure why you think those brief statements indicate that Uber drivers are employees rather than contractors. What you wrote has nothing to do with if they are contractors or employees.

      >The driver's fares are set by Uber
      Why can't I hire a contractor where I say how much I pay? That's usually part of the contract. It's most of the point of the contract.

      >Driver's have to abide by Uber's code of conduct
      Contractors have to conform to the requirements in the contract in order to continue the contrac

      • Re:If it quacks like a duck... (Score:4, Informative)

        by Dan667 ( 564390 ) on Monday October 08, 2018 @06:30PM (#57448260)
        I just checked and there was zero negotiation when you go to the online form to get hired as a uber driver. This is very clearly an employee application form.

        • They are paid a portion of the fare, not a fixed hourly rate. So that is more like a contractor than an employee. If they drive around to get to areas with fares, and don't get enough to cover their gas/depreciation, then they can take a loss. That is one of the IRS criteria for contractors vs employees.

          Also, employees can negotiate their pay, and often do.

          • Being paid a portion of the sale, like a sales person who works on commission? They are not all contractors, some are employees.

          • Re: (Score:1)

            by Anonymous Coward

            I think you missed the point entirely. Paid a portion of the fare is a sales commission. No contractor is going to accept a "fare"/contract where they lose money. Uber is forcing people to do this by over saturating the market with their employees. This is why every big city has a limit to the number of taxis and regulate taxi fares.

            Contractors can negotiate their pay, yet Uber doesn't allow it.

            • Re: (Score:2)

              by Bert64 ( 520050 )

              Employees are paid a fixed wage wether there is work or not, and potentially an added bonus/commission depending on their performance.
              Uber drivers are only paid that commission, and don't have any base salary.

            • I agree they should probably put in some kind of bidding system for the contractors. ( the fact there are too many is supposed to cause enough people to quit that it Evans out).

          • They are paid a portion of the fare, not a fixed hourly rate

            And this lawsuit is over whether or not this practice is legal.

            That is one of the IRS criteria for contractors vs employees.

            Since this is a state lawsuit the IRS's criteria are irrelevant. Only CA labor law matters.

        • What does negotiation have to do with signing a contract? If either accept all the terms or you don't, and you don't accept the contract.
          What's a driver going to do? Ask for more money because they're a "better" driver? Or they'll get people somewhere faster (by breaking the law?)
          They don't need to negotiate with their drivers unless there is a shortage of people wanting to drive.

          • Re: (Score:2)

            by Uberbah ( 647458 )

            What does negotiation have to do with signing a contract?

            Everything. Any more grade school questions?

            • This is of coarse correct. One of the things that is a 'weird grey area' for uber is that they are having 'contractors' who do not regularly re-negotiate rates, that and there is a 'long term nature' to the agreement, which is probably the real kicker for them not being simply contractors.

              • Employees regularly re-negotiate rates. They're not even restricted by how often they can do so by their contracts.
                Unless you're a schmuck who turns up to work just to eat lunch.

      • Re: (Score:2)

        by sjames ( 1099 )

        In Ca. Item B of the ABC test seems to be

        (B) that the worker performs work that is outside the usual course of the hiring entity's business;

        Note that the ABC is three statements that must ALL be true for a person to be a contractor rather than an employee.

        So unless driving people from point to point is NOT part of Uber's usual business, Uber drivers are employees.

      • Comment removed based on user account deletion

    • I'm an IT contractor, working for a company that has IT systems.

      They set my hourly rate
      I have to abide by their code of conduct
      They'll terminate my contract if I break it
      They'll terminate my contract if I don't perform
      They provide me with the work I need to do for them
      I need to do everything they ask me to, in line with my contract
      I need to build things to their requirements
      They'll tell me what I'm doing wrong if required

      That applies to any freelancer. None of what you've said is relevant to the employee/co

      • Re: (Score:2)

        by Uberbah ( 647458 )

        They set my hourly rate

        If you're an independent contractor, you negotiated your own rate. Which no Uber driver can do. Which means your analogy falls apart before it gets out of the gate.

        • Re: (Score:2)

          by Bert64 ( 520050 )

          Uber also negotiate - you accept the rate they're offering, or you don't, they won't make you any other offers.

          The same can be true of any independent contractor, the company you contract to is under no obligation to negotiate. They can set the rate they're willing to pay and refuse any changes. It all depends on the market conditions.

        • I tell them how much I want, they say yes or no.

          When I was an employee, I also negotiated my salary. I did so several times a year. How else do you expect pay rises?
          That's not something you get to do with contracting, changing rates part way through a contract.

          The negotiating thing is more an employee thing than a contractor thing.

    • First of all technically speaking, contractors ARE employees, the are a specific sub category of employee, they contract for a short time. In the case of uber , I believe you contract literally per hour, as you can set any day or any time any place you want to work and refuse work any other time. (A non contract employee is told when and where to work).

      The driver's fares are set by Uber ( not exactly true, the 'fair' amount, for a route is set by uber, and both people agree to pay it. It actually would b

  • "The standard for summary judgement is that there is no triable issue of material facts. That seems to be the case here," Wrong! That's only half - if, in the Judges mind there are only matters of law, the judge can rule for or against the plaintiff or the defendant without a trial. That's actually what will happen here.

    • That's not quite how this works.

      A summary judgment like this doesn't result in any legal action. What it does is set the ground rules for the trial to come later. The lawyer says to the judge, "Assume A,B,C are true. What is the consequence of that in trial?" The judge makes a statement, which the lawyers for both parties use to form their arguments for the later trial.

      For instance, if Uber doesn't want its drivers to be considered employees under California state law, and the judge agrees with Diva Lim

      • not exactly. in summary judgement each side says what are matters of law hoping for a ruling, which the judge can decide on then and there without a trial, including all the issues - so no trial at all, and which issues are matters of fact and are decided at trial.
        • by the way I know Michael Gibbelson and have done work for him...as a matter of law he's asking the judge to rule without a trial...
  • So by this logic, everybody bidding on contracts on freelancer.com is now an employee of freelancer.com and entitled to minimum wage for the duration of their membership? This fundamentally fails the employment test of mutuality of obligation because an Uber driver is under no obligation to accept any available drive.

    • I'm not sure that's a valid conclusion. I do think this applies to Uber, because Uber operates as a way for people to get rides. Users of Uber generally see it as a cheap Taxi service, and many Uber drivers use Uber as their primary source of income.

      If you compare it to a more general freelancer website, the result isn't as clear. Because such websites don't have a fixed job that they are asking freelancers to do, it isn't at all obvious that the (B) test applies. It might, but that would be up to any f

      • And a ride hailing company doesn't have fixed rides/routes it fulfills. Freelancer.com IS a main source of income for a non-trivial fraction of it's members.

    • because an Uber driver is under no obligation to accept any available drive.

      While that is true, if they don't accept rides, they get kicked off the app. Oh, that's an obligation.

      • Easy fix, then. Remove the kicking off the app, and everything will carry on as usual only without the spurious legal wrangling.

    • because an Uber driver is under no obligation to accept any available drive.

      Except they are. Don't accept some rides and you get kicked off the app.

      Doesn't matter what Uber says, it matters what Uber does.

  • Both Uber and Lyft skirt cab and limo regulation by calling themselves ride share technology companies. Also claiming drivers are neither employee's or contractors because Uber and Lyft simply use technology to connect the rider with the ride share person. Unfortunately because they also bill the rider direct the become a representative of the driver but only because they provide the leads, and billing services.
    However, This arrangement is being challenged more and more by cities and governments.

  • Why? (Score:1)

    by Anonymous Coward

    Why does anyone on slashdot defend Uber? Sure, they spearheaded a business model, but they've gradually boiled us all into believing exploitation is ok. They started out as a great opportunity for anyone with a vehicle and some spare time. Now they're just a taxi company that takes no financial risk themselves, offloading it on their employees.

    I was split on my opinion until a driver explained to me:
    1) if he completes a drive in less time than anticipated, Uber pays him LESS. This is a classic behavior of e

    • Why does anyone on slashdot defend Uber?

      For the same reason so many shit all over the idea of unions: because they're elitist snowflakes who think they're in the top .01% of workers, are compensated accordingly, and any gubbmit interference or union would get in the way of that.

      That they are serfs kissing the asses of their feudal lords for a pat on the head never occurs to them.

    • It's not that we support Uber.
      We support the rights of people to decide what's good or bad for themselves without interference from the Big Brother or Taxi cartels.
      We oppose the rent-seeking by the aforementioned corrupt Taxi cartels at the expense of us, the people.

      So long as nobody is forced to associate with Uber as a rider or passenger, they (Uber) are the good guys here.

  • One thing that vexes me a bit about the ruling: if Uber were bought out (by, let's say, Microsoft), would that change the legal argument at all?

    It disturbs me that it might. Clearly if Uber were purchased by Microsoft, the drivers would no longer be a core part of the company's business. But they would still be central to a particular product which they would provide. Here's hoping future court decisions fix this loophole, a loophole which may drive more mergers without actually protecting workers.

    • Uber's business regardless of who the owner is, does not change because their owner is doing something else as well.

    • Not a chance. If Uber was still a material portion of their business then it would t work.

      But, if Microsoft started their own ride sharing app for their employees only, that could be fair game.

    • Clearly if Uber were purchased by Microsoft, the drivers would no longer be a core part of the company's business

      Companies can have multiple lines of business. For example, Microsoft sells hardware, software and cloud services. It doesn't matter if one of those groups makes the most money, Microsoft's "core business" include all three.

  • Given that most Uber drivers drive for Lyft as well, does that mean that they've gone from contractors to double-dipping benefits from two employers?

  • Full disclosure: I used to work for a Southern California limo company that occasionally contracted with Diva.

    I think it's good that Diva is doing this as they're really sticking up for the whole industry (hence the class action including several companies). To be a chauffeur and to run a transportation company, there are laws, regulations, and yes bureaucracy involved. The company I worked for and any other non-fly-by-night company follows these laws and pays the fees and get all kinds of licenses and insu

  • Uber drivers get their salary via Uber, so they are employed by Uber. The limo company uses the service provided by Uber, the Uber drivers. The limo company hasn't employed any Uber drivers, they are simply using Uber's service. Just my personal opinion.

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