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Uber and Lyft Drivers Challenging Independent Contractor Status

  • February 24, 2015
  • Miles Buckingham
  • Comments Off on Uber and Lyft Drivers Challenging Independent Contractor Status

In two California cases filed this month, Uber and Lyft drivers are seeking to be considered employees rather than independent contractors. The Uber and Lyft business models has the companies acting as clearing houses for assignments. Drivers can choose whether to accept any particular assignment (or to reject them) If a proposed ride is accepted, the company and the driver share the fee for the service.

As independent contractors, these drivers do not get the benefit of laws governing minimum wage, overtime pay, workers’ compensation, unemployment insurance, or collective bargaining. More immediately, though, the drivers don’t get reimbursements for mileage and other expenses incurred in their jobs.

The basis for the drivers’ claims stems from the companies’ requirement that the drivers follow certain rules of conduct, and from the companies’ ability to drop the drivers for poor customer satisfaction. At the heart of all this is the drivers’ arguments that the historical tests for financial, behavioral, and relationship control no longer fit the modern economy. Judges in both cases have suggested that they are likely to let the cases proceed. Depending on what happens in these cases, and in their wake, the definition of “employment” may be substantially changed, and employers will need to revisit their own designations of employees and independent contractors to avoid liability.