According to the California Labor Commission, a San Francisco-based Uber driver who filed a claim against the rideshare company is an employee and not, as Uber argued, an independent contractor. The ruling orders Uber to pay the driver about $4,000 for expenses.
The ruling, which Uber considers non-binding, could potentially have devastating implications for the rideshare company in California. If similar rulings are issued regarding other rideshare companies like Lyft or sharing economy players such as Airbnb, Instacart, and TaskRabbit, we could see the growth of these popular and innovative companies stifled as they cope with the costs associated with having providers classified as employees.
The California Labor Commission ruling states that Uber is “involved in every aspect of the operation.” It is true that Uber provides a technology and that it carries out background checks on drivers. But Uber does not provide vehicles or set any hours or for its rideshare drivers. In fact, according to research on Uber wages conducted by Princeton economist Alan Krueger and Uber’s Jonathan Hall, only 38 percent of Uber drivers rely on Uber as their sole source of income.
Regulators and lawmakers ought to realize that Uber drivers, who are often driving for Uber part-time while using their own vehicles on their own schedule, shouldn’t be treated the same as traditional workers.
Read more at http://www.cato.org/blog/ca-labor-commission-uber-driver-employee
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