Over 385,000 current and former rideshare Uber drivers are suing the company over their business model. The company maintains that all drivers are independent contractors. Therefore, they should not have to pay overtime, workman’s compensation and many other benefits. The employees maintain that Uber makes rules that require them to act in the way that employees must act. In Great Britain, the government declared that drivers should have the status of employees, but cases remain in court in the United States.
Why do Uber Drivers say they are Employees?
While there are many individual cases against Uber, the main case that most experts are watching carefully involves Uber driver Barbara Ann Berwick who filed a case against Uber with the California Labor Commissioner. The commission found that Berwick was an employee after developing an 11 point test determining if Uber drivers were employees or freelance workers.
In this case, the commission found that Barbara was an employee because Uber provided iPhones to their drivers, received and monitored approval ratings from customers, refused to let drivers work if their approval rating fell too low, got rid of drivers who did not work in six months, set rates that customers were to pay and that workers did not need a special skill. In Barbara’s case, the commission ordered Uber to pay Barbara $4,000 to cover her car expenses and tolls.
In one of the latest cases, Pennsylvania limousine drivers are contending that they are on-call workers because the company requires them to dress in a certain way. The drivers also contend that they cannot participate in personal activities when they are signed into the Uber app, according to Richard J. Reibstein, a New York City-based labor lawyer.
What is the Future of Uber?
Barbara’s case spurred others to action. As of the middle of 2016, the company found themselves involved with 70 federal court cases and had settled 60 others out of court.
New York University professor Arun Sundararajan who is author of The Sharing Economy says:
“It’s the personality of the early team, which is very much ‘we’re going to dominate the world, and we’re going to ask for forgiveness rather than asking for permission.”
The future of Uber may not be as bright as many people assume. Experts suggest that the company is worth more than $60 billion and has $11 billion in cash. The company, however, faces one lawsuit that, if it settles against them, is worth more than $100 million dollars. An antitrust suit in New York revolves around the company setting driver’s rates instead of letting driver’s set their own may settle for over $1 billion dollars.
Taxi drivers in Southern California are suing the company over unfair business practices. Other drivers are suing claiming that their personal information was stolen. Entrepreneur Kevin Halpern claims that Uber was his idea and that Uber’s CEO stole his intellectual property. San Francisco Uber driver Abdo Ghazi is suing the company for medical expenses after he was stabbed while driving for the company.
Meanwhile, the federal taxing authority Internal Revenue Service has created a 20 point test to determine if the worker is self-employed or should be treated as an employee. If Uber loses there, they may be responsible for millions in government payments.
Many Uber drivers insist that they should be treated as employees instead of self-employed individuals. United Kingdom courts have found that they think the drivers are right. The company faces numerous court cases in the United States about this new business model. One of those cases involves rather drivers should be paid while they are waiting to answer calls. As with any new business model, these cases are likely to be in court for a long time.
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