Uber Might Want to Freak Out: Officials Rule a Driver Must Be Paid Properly
File photo from Uber
A California ruling that is making waves in the "ride-share" industry was revealed today, and Uber is not happy.
The California Labor Commission, weighing in on the case of Uber driver Barbara Ann Berwick, said that the tech firm is "involved in every aspect of the operation" and therefore controls the driver as an employee and not as an at-will freelancer.
It's a heavy conclusion: The commission is saying that Berwick should have been treated as an employee under the law. That would usually entail proper wages, breaks and expense compensation — all things left out of the business plans of the ride-share firms like Uber, Lyft and Sidecar.
However, the body made it clear that the decision applies to Berwick's case only. It does not technically set precedent.
"The Labor Commissioner’s evaluation of whether someone is an independent contractor or an employee is done case-by-case based on the facts before her," the California Department of Industrial Relations said in a statement this afternoon.
Here's a statement sent to us by an Uber spokeswoman:
The California Labor Commission’s ruling is non-binding and applies to a single driver. Indeed it is contrary to a previous ruling by the same commission, which concluded in 2012 that the driver "performed services as an independent contractor, and not as a bona fide employee." Five other states have also come to the same conclusion. It’s important to remember that the No. 1 reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride-sharing companies.
The 2012 ruling by the commission states, in part:
Defendant did not supervise or direct his work and paid him only when Plaintiff involved Defendant. Based on the testimonies and evidence presented, Plaintiff performed services as an independent contractor of Defendant, and not as a bona fide employee.
Uber calls its drivers "partners" and notes that they can start and stop working whenever they want. They're paid by the ride. Uber takes a cut of each fare.
The arrangement allows Uber to call itself a platform that simply pairs people with cars and spare time with other folks who want a cheap ride.
The commission cited a case in which cab drivers were determined to be employees.
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In the Berwick case, hearing officer Stephanie Barrett, the virtual judge here, argued that Uber had "all necessary control" over the relationship, including setting prices, setting vehicle standards and discouraging tips.
Berwick, however, was not awarded hourly pay. The commission ruled she is owed mileage, toll fees and interest amounting to $4,152.20.
Uber filed an appeal yesterday.