Pixel Envy

Written by Nick Heer.

Uber and Lyft Desperately Don’t Want to Be Required to Consider Their Drivers as Employees

Hamilton Nolan, Splinter:

I sincerely hope that what I am about to say is already obvious to anyone empowered to be involved in negotiation legal, political, or labor policy, but: The one thing they don’t want to give you is the thing that you need to get. This offer from Uber and Lyft is like a kidnapper offering you a softer blanket, as long as you agree not to ever escape. No thanks. These companies know very well that once their workers become actual employees, they will get a host of benefits automatically, and they can formally unionize to win themselves many more benefits and increased pay. These companies, which have never made a dollar even while exploiting their workers, fear this. So they offer some concessions.

Uber’s S-1 filing is revealing for why they are fighting so desperately against treating drivers as employees:

If, as a result of legislation or judicial decisions, we are required to classify Drivers as employees (or as workers or quasi-employees where those statuses exist), we would incur significant additional expenses for compensating Drivers, potentially including expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes, and penalties.

Meanwhile, taxicab drivers have been receiving confirmation across the United States that they are employees, not independent contractors. The U.S. Department of Labor found that Stanford Cab in San Jose misclassified drivers, and courts in California and New Jersey have ruled that taxi drivers are employees. If drivers are found to be employees, Uber and Lyft would no longer be able to undercut taxicab companies by not providing full compensation.