Uber Drivers Not Classified As Employees

The National Labor Relations Board has classified Uber drivers as independent contractors, rather than employees. Uber drivers have recently advocated for higher pay and better working conditions, but this classification presents a significant roadblock. Independent contractors don’t have the same legal protections as employees. For example, this classification makes it difficult for Uber drivers to form a union and prevents drivers who work more than 40 hours a week from getting overtime pay.

Employee Classification Means a Higher Cost for Uber

If Uber treated its drivers as employees, the company’s labor costs would likely rise 20 to 30 percent. Uber’s stock prices are already on the decline, as it lost almost $2 billion last year. This classification from the National Labor Relations Board reverses the previous stance of the Obama Administration, which argued that people who work through smartphone apps were likely classified as employees. For example, in 2016, Obama’s labor board issued a complaint against Postmates, a food delivery app, which stated that delivery workers were employees. This memo is an important new precedent that suggests app workers cannot claim federal labor protections. With many other app businesses on the rise, employees must be aware of their rights and legal protections.

Future Implications for Uber Drivers

Uber responded in a recent public statement, saying “we are focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value.” Additionally, the new classification as independent contractors means that Uber did not violate federal labor law with its treatment of drivers. As independent contractors, drivers don’t have certain benefits like overtime pay or worker’s compensation coverage. Therefore, it’s difficult for these workers to demand better working conditions without employee status.

What Makes Uber Drivers Independent Contractors?

The National Labor Relations Board mainly concluded that Uber drivers are independent contractors was because these employees have an opportunity to profit from the activity in the same way an entrepreneur would. Because drivers have so much control over their cars, work schedules, work location, and the opportunity to drive for competitors like Lyft, the board determined that they should be classified as independent contractors. However, others suggest that Uber drivers should be considered employees. For example, employees, rather than independent contractors, must perform an action that is central to the business. Most people would say that driving is essential to Uber’s business. Therefore, we may see a push to classify drivers as employees in the future.

Seek Legal Assistance Today

If you have been improperly classified at work, seek legal assistance today. The Working Solutions Law Firm, located in New York City, can assist you. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel.