Uber’s ability to continue classifying their employees as independent contractors took a huge blow as a judge in the UK ruled that their drivers are salaried employees.
Uber’s model since their inception has been to hire drivers on a contractual basis as independent contractors vs employees. This is common in the rideshare industry. Drivers can clock in anytime and make money like a taxi service. Under this model, rideshare companies were under no obligation to provide benefits such as a 401k or conform to guidelines for FMLA or other similar employee guidelines. Although this ruling was specifically in the UK, many states in the US have been taking similar positions. California was successfully in saying both Lyft and Uber were obligated to pay their drivers and give these drivers those employment benefits. California courts ruled that the drivers should be classified as employees under a state law that is designed to give said workers more protection, something that the two rideshare companies argued against.[1]
This case, first filed in 2016 in the UK, was brought on by a driver who wanted what they had offered to him to come work for them. With this final appeal, the UK has ruled that Uber must treat their drivers as employees not independent contractors. One further issue resolved was a determination of when the drivers were “on the clock.” Rideshare companies had taken the position that the drivers were not on the clock until they accept or pick up a ride. They ruled that these employees are considered on the clock the moment they turn on the app, not when they pick up fares as the company tried to argue.[2]
What this case means for the various rideshare economies such as Lyft, Via and Uber are that they were essentially using their drivers as contractors. This case could have widespread implications for other companies that use independent contractors as their model such as real estate, insurance, or similar industries.
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[1] https://www.npr.org/2020/10/22/926916925/uber-and-lyft-must-make-drivers-employees-california-appeals-court-rules
[2] https://www.cnn.com/2021/02/19/tech/uber-uk-workers/index.html