Uber lost a California legal challenge from a single driver who claimed that the ‘sharing economy’ giant was sidestepping its obligations to the worker as a misclassified employee, while being carried on Uber’s books as a freelancer. NY Times reports Isaac and Singer make the case:
Companies like Uber and its rival Lyft, and Instacart, a grocery delivery service, have long faced questions about whether they are creating the right kind of employment opportunities for both the economy and for workers. The technology companies have contended that their virtual marketplaces, in which people act as contractors and use their own possessions to provide services to the public at the touch of a smartphone button, afford workers flexibility and freedom.
Yet labor activists and others have said such roles — with people working as freelancers and having little certainty over their wages and job status — are simply a way for companies like Uber to minimize costs, even as they maintain considerable control over drivers’ workplace behavior. They say that such control is typically the hallmark of an employee relationship, which should bring with it benefits, more stable pay and greater job security.
The classification of freelancers is in dispute across a number of industries, including at other transportation companies. And the debate is set to escalate as the number of online companies and apps like Uber and others rises. Venture capitalists have poured more than $9.4 billion into such start-ups — known as on-demand companies — since 2010, according to data from CB Insights, a venture capital analysis firm, spawning things like on-demand laundry services and hair stylists.
“For anybody who has to pay the bills and has a family, having no labor protections and no job security is at best a mixed blessing,” said Robert Reich, former secretary of labor and a professor of public policy at the University of California, Berkeley. “At worst, it is a nightmare. Obviously some workers prefer to be independent contractors — but mostly they take these jobs because they cannot find better ones.”
If this ruling is upheld and used as a blueprint for thousands of other claimants, Uber’s $40 billion valuation might be blowing in the breeze, and the laissez-faire economics that underlies the ‘sharing economy’ might be pulled out from under Uber and its myriad counterparts.
from Stowe Boyd http://stoweboyd.com/post/121829752942
