Driving Ms. Classification: Uber’s possible misclassification of drivers

By: Gabriel Arevalo

Earlier in the month of September the Northern District court of California found that Uber drivers are de facto employees.[1]  A recent decision on September 1st, establishes that the drivers do have a primia facia case to determine that they are presumptive employees and can move on as a class action law suit, the court further states that it is up to Uber at trial to prove that the drivers are not employees but instead independent contractors. The court further states that the drivers have to satisfy that they can pass the common law test to determine if a worker is an employee.

Why does this matter? Well in general large companies tend to believe that classifying workers as independent contractors instead of employees is cheaper and beneficial to their business models.[2] Uber claims that its drivers are independent contractors and not employees, which is one of the key bases on how their business model operates.[3] By classifying workers as independent contractors companies can keep costs and reduce liability, companies do not have to pay over time or health benefits as well as avoid having complete liability over the actions of their workers.[4]

The plaintiffs allege that the following factors should determine that drivers are employees and not independent contractors.[5] The plaintiff in their case claims that they are employees through the work control test highlighted in Borello v. Department of Industrialized Relations. [6]   The Borello court finds that in this case cucumber sharecroppers although not under full control of an employer were still found to be employees when applying the statutory work control test. [7]

Does Uber have enough control over its drivers to be considered an employee/employer relationship? The court finds that there is enough evidence for a jury to accurately determine whether Uber misclassified their workers or not.[8] The plaintiffs claim that Uber does have enough control over drivers that they are not just independent contractors. The arguments for control include the use of GPS monitoring as constant surveillance.[9] Another argument made is that the right of Uber to terminate drivers at will constitutes complete control similar to that which would be held over an employee.[10] The plaintiffs also argue that the five star rating system used by passengers which evaluates drivers’ performances is a form of super vision which is consistent with an employer/employee relationship.[11]

It seems that the jury will have to determine if GPS tracking and customer rating which is facilitated by Uber is enough to constitute direct control. It seems that Uber has attempted to avoid having direct control over their drivers by taking a behind the scenes approach. The court in this case doesn’t seem to find that there is enough evidence for a jury to decide but does not take the responsibility of classifying the drivers itself. What could a reclassification of drivers mean for the future? Could Uber be facing a long journey of restructuring its business model in order to better facilitate its newly found employees? One thing is certain if a jury in California does find that Uber drivers are in fact employees and not independent contractors it will be a major blow to Uber.

[1] O’Connor v. Uber Technologies, Inc., No. C-13-3826 EMC, 2015 WL 5138097, at *5 (N.D. Cal. Sept. 1, 2015).

[2] See Phillip R. Maltin, By Any Other Name No Matter What Workers Are Called, Their Status and Treatment As Employees Are Subject to A Variety of Fact-Based Tests, L.A. Law., SEPTEMBER 2001, at 53

[3] https://www.uber.com/driver-jobs

[4] Supra at note 2

[5] Id.

[6] S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341, 769 P.2d 399, 256 Cal. Rptr. 543, 1989 Cal. LEXIS 975, 54 Cal. Comp. Cases 80 (Cal. 1989)

[7] Id.

[8] O’Connor v. Uber Technologies, Inc., No. C-13-3826 EMC, 2015 WL 5138097, at *6 (N.D. Cal. Sept. 1, 2015).

[9] Id.

[10] Id.

[11] Id.

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