I've had a quick read, the argument seems to be that because the driver is needed to fulfil Uber's rides that they become indistinct from Uber as a business itself; so they're employees.
They make some references to Case law for a Yellow taxi case back in 1991. (at least that was my reading!)
Yes, and McDonalds has a business of connecting people who want hamburgers with people who are making hamburgers.
As one can quickly see that line of argument is exceedingly thin. In order for it to make even a little sense it would have to be rephrased to something more like an argument that Uber's business isn't providing rides, but connecting people who need a ride to an independent business that offers rides to people.
But McDonalds employees aren't also choosing to possibly flip a burger for BurgerKing in the same shift. One can quickly see your line of argument is exceedingly thing. The fact that alternatives exist and many drivers do operate for multiple services at the same time, shows that there is an independent business.
That argument has some merit to it, in the abstract, but this decision was regarding a Plaintiff who did not and had not ever driven for any other service, and that issue wasn't presented as a defense.
Which was entirely the plaintiff's choice, was it not? If I'm a contractor and I choose not to solicit jobs from a particular customer base, does that somehow mean that those other jobs didn't exist? If anything, the fact that some drivers do this and others do not shows some for of "managerial" skills that were cited as nonexistent.
Uber, represented in the hearing by high-priced attorneys, did not apparently bring up the idea that the Plaintiff could have (or should have) worked simultaneously for other car service apps. Presumably there were legal reasons why that argument wasn't compelling.
But taking a step back, though it does seem to be a vaguely mitigating factor, maybe, in the abstract, the fact is that this woman wasn't a contractor by the legal definition.
The law doesn't say that employee/employer relationships are determined by what could have happened in some alternate universe. There are full time employee plumbers and carpenters and programmers, and contractor plumbers and carpenters and programmers. They use multi-part tests and precedent to determine which is which.
The determination was that this woman was -- in fact - an employee, it was not a hearing to determine a hypothetical scenario.
Somewhere in California there may be an Uber driver with a fact pattern that makes them a contractor, or not, but it'll take more cases to figure that out.
Hm.. I do see the distinction there, but it seems to have interesting consequences for other industries that operate with a contractor model. If this woman could be deemed an employee by essentially contracting for only one customer base, couldn't contractors in other industries essentially become employees without ever being formally hired by restricting their customer base?
Of course this is assuming a similar situation with an organization that aggregates customers and connects them to contractors doing the work. The specific example that I saw elsewhere in the thread was the contracted chicken farmers[0]
> I do see the distinction there, but it seems to have interesting consequences for other industries that operate with a contractor model. If this woman could be deemed an employee by essentially contracting for only one customer base, couldn't contractors in other industries essentially become employees without ever being formally hired by restricting their customer base?
Yes. infact that happens quite a lot (subject to jurisdiction).
Many builders I know are very concerned about hiring the same contractor too often as they might accidently become an employee (and hence have to pay taxes on them).
I build software applications for a living. I do not have required shifts. I do not have a uniform. I am not provided with all of the tools that I use to build said applications.
These things have nothing to do with my status as an employee or contractor as you'd never guess which one I was based on these facts.
Given your statement, your employer might be able to classify you as a contractor as long as you would stay on given the lessened benefits and self employment tax.
In software, the tools are a big determination, i.e., do you provide your own laptop? You might be a contractor. Are you given benefits such as reasonable vacation days? You might be an employee.
Mis-categorization of employees is a big issue for the IRS and few "contractors" are informed or in a position to threaten to challenge it.
In the software business, I've had an employer who gave me an employment contract and then just decided to write me checks like a contractor each month until I raised a fuss.
> Yes, and McDonalds has a business of connecting people who want hamburgers with people who are making hamburgers.
I don't know for McDonald's, but for many fast food companies that's absolutely true: the main company (the brand) only sells the franchises, and the franchisers actually own and operate the restaurants. However, the main company holds very tight control over the experience (prices, branding, inspections, menus, ...).
Indeed, the court's argument was "if Uber didn't exist, the drivers wouldn't be drivers", as in "drivers are NOT independent".
So, if Lyft and Uber and a hypothetical third all had similar business models, and a driver could find people to drive on more than one platform they would be considered independent contractors. I assume Uber wouldn't allow an Uber driver to also be a Lyft driver (citation needed).
This makes sense, and is similar to determining if ANY contractor is an employee. One determinator is if the "contractor" has multiple "clients". If a contractor only ever has one client, and is with that client for an extended time they are more likely to be found to be a full time employee instead.
Isn't the difference here that a contractor "could" have multiple clients. The fact that some might opt not to do that doesn't seem to have a significant impact on how they should be classified.
It's not the only factor but it is one. I guess it ultimately depends on the country / state / court.
Others factors generally include things like how you get paid (do you bill the client, or are you on payroll?) or the nature of your work (projects and deliverables, or day-to-day operations, etc).
Of course many of these things favour classifying Uber drivers as contractors, but there's enough of a gray zone for a court to rule they are full-time employees.
One wonders if some enterprising Craig Newmark type person will set up a service offering fewer guarantees but charging a small fixed fee on each transaction, much as Craigslist does with job postings.
That's true for services like https://www.upwork.com, too, though. Upwork offers to match people with specific skills to people who need to hire them. Upwork helps track the work being done, and collects the clients' payments, passing them along to the workers minus a percentage.
I think providing a service to connect buyers and sellers should be able to be distinct from having employees.
It's a very fair point. I would add that since you seem to be able to be a driver for Uber/Lyft, etc. simultaneously, that would seem to suggest contractor as well.
Sure, but I'm not sure what conclusion that helps us draw in regards to a contractor/employee distinction.
The former is saying a business cannot exist without employees performing critical functions (I'm not saying that this is de facto truth, but just phrasing the argument).
The latter is saying that without a business, you don't have employees/contractors, which makes sense, but seems obvious and inconsequential.
I think it's more like "You can't have one without the other, therefore they aren't just contractors".
A ride-sharer / driver needs the platform and the platform needs the driver, fundamentally. It's not like most contracting where it's not the end of the world if all the contracts end.
What's the difference between a McDonald's franchisee and an Uber employee? This ruling would seem to indicate a franchise "owner" is nothing but an employee of McDonald.
A franchisee exercises management control that can affect profit and loss, can subcontract work performed,etc. The lack of these features are among the things cited as making uver drivers employees rather than contractors, so I don't get how you can say that this ruling would make McD franchisees employees.
A McDonald's franchisee has much more discretion in how they operate their business. They choose who to hire, how to manage them, where to run ads etc. They do have less freedom than someone running an independent restaurant, but it's very far from Uber's situation.
In addition to the other responses, McDonald's franchises require substantial investment on the part of the franchisee. You have to plop down hundreds of thousands of your own money, which represents entrepreneurial risk. This was found to be missing in Uber's case (according to the ruling) since there is precedent that bringing your own car doesn't qualify.
Additionally, McDonald's (or similar) locations are independently managed to a certain extent, that's why ads always say "at participating locations".
For one, the franchise contains multiple people so there is most definitely managerial work going on. I also imagine franchise owners possess some freedom in how they manage stocking and of various supplies, and might be free to choose suppliers.
You might be interested in how California is dealing with the franchise relationship as well[0] There are specific rules about that relationship that separates it from an employee.
Is a Uber driver allowed to hire other drivers to do his job? A franchise owner can have multiple McDonald restaurants at the same time and hire workers. If no then they are not the same.
Does Uber allows people to hire others to drive Uber cabs or not? that's the question here if you want to compare McDo with Uber. If I become a McDo franchisee, I don't have to flip sandwiches.
They make some references to Case law for a Yellow taxi case back in 1991. (at least that was my reading!)