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Uber Drivers Are Employees, Not Contractors, Says California Labor Commission 346

siddesu writes: The California Labor Commission has ruled Uber drivers are employees and not independent contractors. The ruling has serious implications for Uber's business model, since it will now be required to offer its drivers benefits that meet the requirements of the Californian labor laws. "Uber had argued that its drivers are independent contractors, not employees, and that it is "nothing more than a neutral technology platform." But the commission said Uber controls the tools driver use, monitors their approval ratings and terminates their access to the system if their ratings fall below 4.6 stars." Uber has previously suspended drivers for registering their cars as commercial vehicles.
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Uber Drivers Are Employees, Not Contractors, Says California Labor Commission

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  • California (Score:2, Funny)

    by Anonymous Coward

    That's the place where they use water on almonds instead of people, right?

    • Re:California (Score:4, Informative)

      by __aaclcg7560 ( 824291 ) on Wednesday June 17, 2015 @03:33PM (#49932101)
      Not sure why this is marked as troll. Each almond nut requires one gallon of water, which is a substantial amount of the water assigned to agricultural use. Unlike the produce fields that can lie fallow during a drought, an almond grove must be watered all the time. Even as almond groves are dying, new almond groves are being planted. Almonds should be grown somewhere else where water is available.
  • Business model? (Score:5, Insightful)

    by Anonymous Coward on Wednesday June 17, 2015 @01:44PM (#49931083)

    Be a cab company and claim not to be.

    Violate the law about cabs and pretend they don't apply to you.

    Generally be a bunch of self-entitled assholes who think they magically get to decide what laws apply to them.

    Act like whiny fucking spoiled children when the world doesn't see it your way.

    Fuck Uber. The assholes who own it are just delusional dicks.

    • Fuck Uber. The assholes who own it are just delusional dicks.

      They are......but they're also the most convenient way to get a ride.

  • by ranton ( 36917 ) on Wednesday June 17, 2015 @01:45PM (#49931087)

    Here is an update to this ruling found in another article [gizmodo.com]:

    Update: Uber pointed out that the ruling only applies to one driver. “Reuters’ original headline was not accurate. The California Labor Commission’s ruling is non-binding and applies to a single driver,” a spokesperson said. “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 number one 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.”

    • by GlennC ( 96879 )

      Uber pointed out that the ruling only applies to one driver.

      Translation, "We're getting what we want as cheaply as possible, screw everyone else."

  • by roc97007 ( 608802 ) on Wednesday June 17, 2015 @01:48PM (#49931103) Journal

    Does this mean by extension that the "bloggers" who contribute to the Huffington Post are employees?

  • WTF???? (Score:5, Insightful)

    by gstoddart ( 321705 ) on Wednesday June 17, 2015 @01:48PM (#49931121) Homepage

    That could affect its valuation, currently above $40 billion

    What delusional, drunken moneys could possibly claim Uber is worth $40 freaking billion dollars? What's that, like 4 centuries worth of projected income?

    Who the hell makes up these stupid valuations?

    They have an app, and a staunch belief they're exempt form laws.

    But $40 billions dollars? That's complete fantasy that is. Real corporations with real assets and real income might be worth that.

    Holy .com level of overvalued companies.

    • Re:WTF???? (Score:5, Interesting)

      by Lunix Nutcase ( 1092239 ) on Wednesday June 17, 2015 @01:52PM (#49931169)

      The venture capitalists and others trying to prop up the current tech bubble. They haven't yet had enough time to cash out while leaving everyone else holding the bag of shit.

      • The venture capitalists and others trying to prop up the current tech bubble.

        Only Mark Cuban from "Shark Tank" is doing the "The sky is falling! The sky is falling!" Chicken Little dance, and he's basically a media company guy, and really has dick to do with tech, so his opinion isn't worth a hell of a lot when it comes to tech.

        To make it clear: just because a small number of companies have very large valuations, and all the tech blogs are screaming about unicorns farting rainbows, doesn't mean we are in a tech bubble.

        For example, why was WhatsApp worth $18B?

        If you base it on revenu

    • Maybe it's Zimbabwean dollars [cryptocoinsnews.com], in which case it means Uber isn't even worth one U.S.A. dollar. I'd be okay with that.

    • Re: WTF???? (Score:4, Interesting)

      by jpapon ( 1877296 ) on Wednesday June 17, 2015 @02:02PM (#49931253) Journal
      It's not really that crazy when you consider their gross revenue of 10 billion, absurd profit margin (all they do I run an app, right?) and massive potential to expand into new markets.
      • Re: (Score:3, Informative)

        It's not really that crazy when you consider their gross revenue of 10 billion, absurd profit margin (all they do I run an app, right?) and massive potential to expand into new markets.

        Uber doesn't make $10 billion in revenue. You must have read a story from last year where it was projected that they may have $10 billion in revenue in 2015. No one actually knows what their revenue is but an investor stated just a few months ago that they were briefed it would be in the $2 billion range:

        Part of that confidence stems from Uber’s impressive sales growth, which the company sees accelerating this year. Uber recently told some investors that it forecasts net revenue, or the amount it keeps after paying out drivers, of more than $2 billion this year, according to a person who was briefed on the matter

        http://blogs.wsj.com/digits/20... [wsj.com]

        • Net Revenue is what we usually term "Profit" or "Income". We usually reserve the term "Revenue" to mean Gross Revenue.

          It's very contextual. Net Revenue and Gross Revenue are valid terms. In financial accounting, "Income" is your revenue, less your "Expenses"; in transactional accounting, it's "Credit" and "Debit". The IRS calls your net income "Adjusted Gross Income", which is what we call business "Profits".

          Mess.

    • What delusional, drunken moneys could possibly claim Uber is worth $40 freaking billion dollars?

      The same people that made billions by investing in Amazon, Google, and Facebook. The Slashdot consensus was that all of those where ridiculously overvalued as well.

      • See also everything from Cisco to Pets.Com. Just because a very few companies were not overvalued - or at least have not yet crashed - doesn't mean that the vast majority weren't.

    • Comment removed based on user account deletion
      • You start a company. You make 1billion shares. You sell one share to your mom for 40USD. BOOM! your company is worth 40 billion.

        Next step: You sell your company to another company for a "reasonable" $1 billion and leave before the purchasing company realizes that your company wasn't worth anywhere near that amount.

        Repeat the above steps as many times as possible.

    • What delusional, drunken moneys could possibly claim Uber is worth $40 freaking billion dollars? What's that, like 4 centuries worth of projected income?

      Uber's net revenue is $2billion (after paying drivers), and growing fast. So it's probably more like 10 years of projected income.

      I know you have a staunch belief that we are in another tech bubble, but you should at least look at valuations before raging. (And hey, as a programmer, if it is a bubble enjoy the cash while it flows).

    • All stocks are complete fantasy. You trade based on perceived value.

  • Can someone point me to the relevant oral argument in this case? There's something, when one listens to an oral argument, that you'll never get from anything written. Thanks.

  • In order to totally eliminate this as a concern, going forward Uber may require drivers to belong to more than one service - as a programming consultant I face the same issue with some clients were they demand to know I have other recent clients also so I cannot claim to be an employee, and there are often hard limits on length of work.

    • clients were they demand to know I have other recent clients also so I cannot claim to be an employee.

      A far better solution is for you to incorporate. Then they can sign a contract with your corporation, rather than directly with you. There are websites where you can form a simple S-corp for a few hundred bucks. This will also make it easier to deduct expeneses, and reduce your chance of an audit.

      • by unimacs ( 597299 )
        It may help but it doesn't solve the problem. We require that any contractors we utilize belong to a corporation, - whether their own or someone else's but it doesn't mean that we couldn't run afoul of IRS rules.
  • by JBMcB ( 73720 )

    FTA:

    "But the commission said Uber controls the tools driver use,"

    You mean the Uber app? That's what Uber is, isn't it? If you hire contractors to staff a phone bank, the contractors don't get to bring in their own phones to use, you can make them use your own phone system.

    monitors their approval ratings and terminates their access to the system if their ratings fall below 4.6 stars.

    So - performance reviews are forbidden when you are a contractor?

    Last I checked, if you work for Uber you can work whenever and wherever you want, which is, pretty much, a textbook contractor arrangement.

    • If you hire contractors to staff a phone bank, the contractors don't get to bring in their own phones to use, you can make them use your own phone system.

      And if you hire a 3rd party corporation to do that, you're in the clear. Of course those people are often W2 employees of that corporation.

      If you bring in a bunch of individuals and tell them what to do, how to do it, and even when to do it (Uber, for example, doesn't compensate you the same way if you won't work during their required hours) then that starts to look a whole lot like you have employees and are trying to dodge the tax consequences thereof.

      As a tech contractor myself, I won't sub out to anyon

  • Comment removed (Score:4, Interesting)

    by account_deleted ( 4530225 ) on Wednesday June 17, 2015 @02:12PM (#49931315)
    Comment removed based on user account deletion
    • by unimacs ( 597299 ) on Wednesday June 17, 2015 @03:18PM (#49931961)
      Yeah, there are labor laws for a reason and if you're using "contractors" you don't have to pay minimum wage for example. There are some Uber drivers that have learned how to game the system and earn OK money, but they work hard and hustle customers.

      The average Uber driver probably makes less than minimum wage, - especially once their expenses are factored in. Uber pays a premium for working certain hours, accepting 90% of rides, taking at least one ride per hour in that time frame, etc. It's hard to qualify for the premium all the time.

      So really what it amounts to is that Uber is dancing around labor laws so that they can offer a cheaper and more convenient service. There may or may not be evil intentions, but that's the end result.

      I guess the question is when does an arrangement for services cross the line into exploitation? It's not always obvious. I may be perfectly happy to do something for a few bucks on the side or even for free just for the experience or the kicks. But what if someone else is trying to earn a living doing the same thing?

      For example, let's say you'd think it be great to sail across the Atlantic on a 70 foot keel boat but you lack experience and a boat. You run across someone advertising the need for crew on a two month sailing tour, - no experience necessary. You have to help pay for food and supplies, plus you have to help sail and maintain the boat along the way. But otherwise there's no charge AND no pay. Sounds like quite an adventure right? Well, a week into it you discover that there's a whole lot of work to do and the "captain" isn't doing much of it. In fact, he's got paying guests that aren't doing anything at all. You want off but the best he'll do is drop you at the next island and you've got pay for your own way home.

      Well, there are laws that govern this kind of thing because it is very easy to exploit people.
  • Uber is on it's way to the grave yard...

    Services like Uber have a serious problem. They want to not be taxi services because of the regulations, but they want to do business as if they where a taxi service. So on one hand, they want to claim to be a means of arranging a private deal between two private citizens and claiming their commission in the process, but on the other hand they don't want to run a taxi service or have any of their "drivers" running a taxi service.

    I don't think we've seen the last o

  • by PeeAitchPee ( 712652 ) on Wednesday June 17, 2015 @02:33PM (#49931519)
    Will California now say that anyone renting out their spare bedroom is an Airbnb employee? Why stop there? Aren't full-time eBay sellers doing the same thing, and shouldn't eBay have to make them employees too?
  • by tekrat ( 242117 ) on Wednesday June 17, 2015 @02:42PM (#49931589) Homepage Journal

    Uber replaces all their drivers with H1-B visa workers.

  • Ebay: Hey we're not an auction site. (Dodges county by county laws against auctions)

    Paypal: We're not a bank either. (Dodges many laws about banks everywhere).

    Uber: Hey we're just doing what everyone else has in terms of dodging laws.

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