The California Labor Commission said that a driver for Uber should be classified as an employee, not an independent contractor.
The ruling ordered Uber to reimburse Barbara Ann Berwick, a former Uber driver, $4,152.20 in expenses and other costs for the eight-week period or so that she worked as a driver for the service last year.
Uber has long claimed to be a technology company, not a taxi company even if its original name was Ubercab. But the labor commission found that it functioned as taxi company and as an employer.
“Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the Labor Commisson wrote about Uber. “The reality, however, is that defendants are involved in every aspect of the operation.”
According to the New York Times, in the course of driving for Uber between July and September 2014, working 60 to 80 hours a week, she said, she earned about $11,000 before expenses and taxes.
“If you work it out, if I didn’t get compensated for expenses, I’d be working for less than minimum wage,” Ms. Berwick told the Times. So she said filed with the California Labor Commission for overtime, expenses and interest, setting in motion the events that led to the ruling.
In the lawsuit, four lenders who finance the purchase of taxi medallions argue that the city and its TLC are letting ride-share companies such as Uber pick up passengers who hail cars using smartphone apps, which is tantamount to accepting street hails. By letting Uber and others operate freely, the city is depriving medallions holders of their exclusive right to respond to street hails, the lawsuit alleges.
The City says that the case should be in Manhattan, where a similar case has been filed, because the Mayor’s principal place of business is there. Lawyers for the plaintiffs called the City’s motion “judge shopping.” They note also that the TLC’s largest office is in Queens and that a plurality of taxi drivers live in Queens.
Uber claims that since its launch in 2012, it has attracted over 16,000 drivers to its app-based taxi service in San Francisco alone. Over 11,000 are still active, the company says, which is more than the number of traditional cabdrivers in the city. “Many” of these drivers are part-timers working fewer than 34 hours a week.
The company also says that its drivers earn more than other taxi drivers in the various cities in which the company operates.
Newsweek points out that “the number of drivers who responded to the poll was startlingly small,” especially when compared with the 160,000 drivers the company says it employs. Just 601 drivers across 20 cities responded to the study. But based on those who chose to respond, Uber determined that 78% of drivers are satisfied with the Uber platform and that their and the average hourly earnings are $19, though some drivers in New York have an earnings of almost $30 per hour. The company says its drivers are attracted by “work-life balance” and the ability to be one’s own boss.
Uber sent its survey was sent to about 5,464 drivers, meaning about 4,863 drivers declined to reply or indicated otherwise that they were not willing to take the survey. Had all the drivers replied, the survey would represent about 3.4 percent of Uber’s more than 160,00 U.S. drivers, Newsweek said. Many drivers were wary about answering honestly questions about their own employer.
Newsweek’s skepticism is more than justified. Indeed, it’s odd that Uber would publish data about its business based on any kind of driver survey since Uber presumably knows exactly how much its drivers earn and how much they work.
“This report is designed to impress American mayors and disguise the predatory nature of Uber’s relationship to its drivers — the company collects money, while the drivers accept all of the risk,” Dave Sutton, spokesman for a public campaign by the Taxicab, Limousine & Paratransit Association, told the Washington Post. The Post also reports that In December, 162,037 “active drivers” completed at least four or more trips for the service. The number of new drivers signing up has doubled every six months for the past two years.
Yahoo News reports that Uber is adding to its roster of ex-public officials. The taxi app service has just hired Michael Allegretti, a one-time congressional candidate, political consultant and Manhattan Institute scholar. Locally, Allegretti joins Matthew Wing, previously Governor Anthony Cuomo’s press secretary, and former TLC official Ashwini Chhabra, whose hiring last fall seems to be under investigation by the city based on suspicions that he had been secretly reporting to Uber while still working for the commission.
The NYC TLC has suspended five of the six Uber-owned dispatch bases in the City. But just as quickly, it lifted the suspension when Uber appealed (or perhaps simply said it would appeal).
Two days ago the TLC suspended the bases after the company refused to submit their electronic trip records to the Taxi and Limousine Commission.
Uber has refused to comply with a TLC directive that it turn over the data, saying it would violate their constitutional rights and share trade secrets. The agency needs the data to make decisions that will affect the taxi industry, as well as investigate passenger complaints.
According to TLC flak Allan Fromberg, as quoted by New York Business Journal: “The suspension wasn’t technically lifted, but I’m now told that Uber submitted an appeal request very late yesterday, and our policy is to issue them a temporary permit allowing them to operate until the appeal is decided…. We had mentioned that this would be the case if they appealed the … decision.”
One Uber base remained open which apparently allowing Uber operations to continue unaffected in the meantime.
Taxi medallion prices, after rising continually for many years, are continuing to fall, with app-based hailing services like Uber taking the blame. The New York Times reports that in NYC individual taxi medallions, whose owners must drive a taxi for roughly 180 shifts per year, fell to $805,000, down 23 percent from 2013’s peak of $1.05 million. Corporate medallions, which may be owned in fleets, traded on average at $950,000, down 28 percent from their peak.
In New York, yellow taxi business has been cut not just by Uber but by the green or outer borough taxis. There is a strong feeling among owners of yellow medallions that the TLC is failing to enforce rules that protect their traditional and investment-backed expectation that they will have the exclusive right to street hails, at least in Manhattan.
The Times reports that medallions are barely selling at all in Chicago and Boston as financing has dried up.