There are many reasons why a company may prefer to use an independent contractor rather than an employee for specific projects or services. However, the decision to classify each relationship as an independent contractor relationship rather than an employment relationship should be taken with care and taking into account the prevailing legal test. As we have discussed in previous alerts, the most important issue is whether the alleged employer retains control over the “manner” in which the alleged independent contractor provides services. NPR transcripts are created on an urgent date by Verb8tm, Inc., an NPR contractor, and created using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative recording of NPR programming is the audio recording. [11] United Kingdom The Court of Appeal, Mr. Y Aslam, Mr.
J Farrar & Others v. Uber BV, Uber London Ltd and Uber Britannia Ltd., file number: A2/2017/3467, 19 December 2018. The plaintiffs themselves claimed employee status. Second, the UK courts` analysis referred to the terms `employee` and `self-employed/entrepreneur`. Ultimately, some drivers may prefer the flexibility offered by independent contractor status, although this also means they are out of the question for many other things. The reclassification would lead to a drop in demand and therefore a significant drop in the number of Uber drivers. [25] The OECD`s 2018 Interim Report defines Uber as a pay-as-you-go ride-sharing company and notes that it is “a digital platform that creates value by bringing drivers and passengers together so they can make a ride on a pay-as-you-go basis. It is based on the following main steps.
First of all, the rental company recruits drivers with access to their own car. It then centrally orchestrates drivers, monitors e.B their hours of activity and locations to provide a transportation platform. Third, the company is developing a platform, including a mobile app, that will allow passengers to book a ride. Finally, it guarantees the quality of transactions through a verification system where drivers and passengers have the opportunity to assess the quality of the interaction” (loc. cit., pages 66/67). As independent contractors, Uber drivers have the ability to choose when and how long they want to work. Apart from that, they can also work for other rideshares or even run their own businesses, in addition to working for Uber. If they were classified as employees, they would no longer have such an opportunity. “There`s no call to action right now, but if that were the case, for example, if a real law or voting measure were introduced, we would definitely activate our driver base,” a Lyft spokeswoman said. [6] For more information, see ECJ C-434/15, Asociación Profesional Élite Taxi v Uber Systems Spain SL, judgment of the Court (Grand Chamber) of 20 December 2017.
The CJEU ruled that in this model of intermediation service, the objective is to take into account drivers using their own vehicle by connecting via a smartphone to passengers who need trips and which is therefore inextricably linked to a transport service. Therefore, it is not the directives governing trade and electronic services in the internal market that are applied, but the common transport policy. Companies cite surveys to argue that the majority of their employees, mostly part-time, do not want to be classified as employees. However, Uber argued that if drivers were to be classified as employees, the company would only have 260,000 full-time driver jobs available, leaving 926,000 drivers unemployed. Conversely, employees must be employees, not contractors, if a company has control over how they perform their duties or if their work is part of a company`s regular activities. These and other companies say they are tech companies, not ride providers. California hopes to prevent what it calls a “parasitic enterprise” from passing on its own business costs to taxpayers and workers. Employees trigger federal and state tax deductions, anti-discrimination, health care, pensions, workers` compensation, and unemployment insurance obligations. You avoid these entanglements by hiring independent contractors, or do you do it? The Uber driver approach represents a means by which a company can challenge the classification of an independent contractor. At any time, a person who, in the opinion of a business, has been properly classified as an independent contractor and treated as such may claim unpaid wages, unpaid overtime, missed meal and rest penalties, and non-compliant business expenses from the labour commissioner`s local office. When such a lawsuit is filed, it is ultimately decided by a court officer who applies California jurisprudence to determine whether the person is an employee or an independent contractor. In the case of the Uber driver, the hearing officer focused on the fact that the Uber driver was providing services that he considered to be “an integral part of Uber`s normal business.” The hearing officer argued that Uber could not exist without a driver, so drivers were an integral part of the business.
In the end, this factor appeared to be the most important to the Hearing Officer, and the Hearing Officer rejected Uber`s argument that Uber was a technology platform for passengers and drivers to do business. Uber and DoorDash said they currently have no specific plans for an awareness campaign. Uber sent an email to all its drivers across the country in August outlining its proposed amendment to the law to combine independent contractor status with certain benefits. In 2020, the number of drivers in the U.S. working for Uber was estimated at about 1 million. This is simply impressive considering that the company was founded just over a decade ago, in 2009. Nevertheless, Uber has also received good news. In Australia, the Fair Labour Ombudsman closed an investigation into the company and decided to label Uber drivers as independent contractors[22]. In addition, Brazil`s highest labor court changed a lower decision and also declared Uber drivers entrepreneurs.[23] California employees must also be compensated for reasonable business expenses.
Specifically, California law requires an employer to reimburse an employee “any necessary expenses or losses incurred by the employee” in performing the employer`s work duties or instructions. These companies cite the negative consequences for customers and drivers that would result from the adoption of the provisions of AB 5. Higher prices for rides would lead to lower demand for Uber services, and for this reason, the required number of Uber drivers would decrease significantly. Still, Proposition 22 also introduced new protections for drivers in California, but not as much as if they became employees. We still have to see whether other States will not take similar measures. The long-term consequences of transforming Uber drivers into employees are difficult to determine, although we can certainly mention Uber`s internal reports on the expected consequences of the driver`s reclassification. .
