Uber Drivers Are Now Employees, Not Contractors

By: jjensen  |  June 18, 2015

An illustration picture shows the logo of car-sharing service app Uber on a smartphone next to the picture of an official German taxi sign

Uber, a ride sharing service based in San Francisco, has been disrupting the transportation economy since their founding in 2009. While they started out as an unknown, taxi-alternative service, the have since grown into a multimillion dollar industry and a household name.

One of the things that sets Uber apart from your typical taxi company is that each driver is, according to Uber, a contractor. Each driver uses his or her own car, sets varied hours, and doesn’t answer to a typical boss. It is this flexibility that attracts many drivers.

Uber spokeswoman Jessica Santillo said, “…the No. 1 reason driver 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.”

While the flexibility appeals to many, being classified as a contractor comes with a few drawbacks. The biggest drawback is that contractors are not entitled to any benefits.

For the last several years, Uber drivers have been petitioning to become full fledge employees. One lawyer, Shannon Liss-Riordan, has been working with drivers to bring a lawsuit against Uber. Liss-Riordan says that Uber found a need in the marketplace and has successfully fulfilled that need. However, she also says, “that gives it no excuse to ignore labor laws that have been put into place over decades that protect workers’ rights.”

This week, the California Labor Commission ruled that in San Francisco, Uber drivers are now company employees, not contractors. On Tuesday, Uber filed an appeal with the state court, hoping to overturn the ruling.

If Uber drivers are given employee status, they will qualify for health care benefits, Social Security, workers’ compensation, unemployment, and reimbursements. Inevitably, this will raise the price of Uber rides and similar ride-sharing companies.


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