The California Labor Commissioner ruled recently that Uber drivers are employees and not independent contractors of the Uber corporation, in a decision that could shake up the car sharing industry. Defendants Uber Technologies, Inc. and Rasier-CA LLC (collectively, Uber) argued that Plaintiff was an independent contractor and that they exercised very little control over Plaintiff’s activities. Uber’s witness testified that Uber was just a “technological platform” that enabled vehicle drivers and passengers to “facilitate private transactions.” The Labor Commissioner found that Uber retained control over the entire operation by providing the workers and obtaining the clients. The Labor Commissioner also explained that a presumption of employment existed, which a party seeking to avoid liability could rebut.
The Labor Commissioner’s Decision lays out the reasons why drivers are Uber’s employees: their work (driving) is integral to Uber’s business (providing transportation services to customers). Without drivers, Uber would not exist. Further, Uber is involved in every aspect of the operation and exercises significant amount of control. Uber vets potential drivers by running DMV and background checks. Drivers have to provide to Uber their banking and residence info. Uber also decides what cars pass muster to be registered with Uber and carefully monitors the ratings Uber drivers receive from customers. Uber collects the money from passengers, takes its cut, and distributes the rest to drivers. Uber discourages passengers from tipping their drivers, making the drivers depend on trips to earn money. The Labor Commissioner concludes that Plaintiff was Uber’s employee given the numerous factors set out above and ordered Uber to reimburse Plaintiff for her mileage and bridge tolls.
The Labor Commissioner’s decision can and may be appealed to a Superior Court. If it is upheld, it could change not only the car sharing industry but other services that have sprung up using the Uber model, such as delivery services, concierge services and others. More importantly, drivers and others who would for these service providers would be considered employees and be entitled to a variety of employment law protections afforded by California law.
If you think you have been misclassified as an independent contractor or have any other employment related issue, please contact Stephen Danz & Associates for a free consultation. With 10 law offices across California, Stephen Danz & Associates is here to serve you and to turn employer wrongs into employee rights.