Gig News — October 20, 2015

Jon Weinberg

Jon Weinberg is a student at Harvard Law School.

This post is part of an ongoing series on labor and the gig economy.

Oregon’s Bureau of Labor and Industries released an advisory opinion concluding that Uber drivers should be classified as employees and not independent contractors.  Portland Business Journal reports that the opinion was issued despite the fact that no complaints were filed in the state, and concerns how the agency would approach an investigation as opposed to the status of a single driver.  In coming to the conclusion that Uber drivers are employees, the Oregon agency applied a six-factor “economic realities” test with factors including the control of drivers by Uber, the permanency of the Uber-driver relationship, and the extent to which drivers are integral to the operation of Uber.  An Uber spokesman responded by noting that the agency failed to solicit testimony from Uber or drivers, and citing statistics Uber feels lend support to an independent contractor classification.

Meanwhile, a Florida agency that formerly found an Uber driver to be an employee has reversed itself.  According to The Wall Street Journal, the Florida Department of Revenue issued a nine-page decision following an appeal of the initial ruling finding that while “there are some aspects of the relationship that show traditional indicia of employment,” Uber fails to exercise the degree of control necessary for an employee classification.

Uber has launched a delivery service, UberRUSH, which allows customers of business clients in New York, Chicago and San Francisco to get same-day delivery of products delivered by Uber worker.  USA Today illustrates the new service as possible competition to FedEx and a compliment to Uber’s food delivery service.  Interestingly, FedEx formerly classified drivers as independent contractors as Uber does, before the Ninth Circuit intervened and required an employee classification.

In a demonstration of the difficulties gig economy workers face in taking collective action, a planned strike by Uber drivers this past weekend calling for tips and higher wages failed to generate much participation or impact.  Per Re/code, there were no reported service operations or protester gathering in the San Francisco Bay Area, though drivers in major cities turned off the app.  The organizing group, Uber Freedom, used Facebook to publicize the action and their pay and tip demands.  Uber responding by saying it welcomes driver feedback and that their flexible working arrangement allows for their actions.  Carmel DeAmicis wrote further for Re/Code on the difficulties gig economy workers face in organizing.

Politicians continue to weigh in on the status of gig economy workers.  Speaking at last week’s White House Summit on Worker Voice, President Obama noted the flexibility and autonomy the gig economy offers workers, but expressed concern on the lack of employee rights and benefits independent contractors receive, reports CNBC.  On the other hand, Fortune highlights that Republican presidential candidate Marco Rubio earlier this month expressed support for gig economy firms and pledged to fight regulators on their behalf.  Notably, Rubio responded to gig economy worker classification suits and “conceded that neither classification truly works, but with the increasing labor shift in that direction, we’ll need a solution soon.”  He joins other presidential candidates who previously addressed the gig economy.

Bloomberg reported on Uber’s appeal of a ruling against it by U.S. District Court Judge Edward Chen in San Francisco finding Uber’s mandatory arbitration agreements unenforceable and looked into what drivers are required to agree to.  Notably, “the fine print in Uber’s driver contract includes a clause requiring the driver to take disputes to an arbitrator. If the two parties can’t agree on an arbitrator, the mediation service JAMS is supposed to play that part.  According to the contract language, Uber and the driver would split the costs of arbitration.  JAMS charges a hearing fee of $7,000 per day and a $5,000 retainer fee to start the process.”  Unsurprisingly, “JAMS spokeswoman Victoria Walsh says her firm hasn’t handled any cases for Uber.”

While Uber continues to face lawsuits and regulatory challenges, other gig economy firms continue to be challenged for their business models.  The Los Angeles Times notes that complaints were filed last month in San Francisco Superior Court alleging that gig economy food delivery companies GrubHub, DoorDash and Caviar misclassify drivers as independent contractors, and they should instead be classified as employees.  Shannon Liss-Riordan, the attorney representing Uber and Lyft drivers in major California federal suits, is representing the workers.  GrubHub and DoorDash are being challenged in class actions, while Caviar faces a demand for arbitration.

In other news, NPR investigated Uber driver health insurance and the onerous requirements and responsibilities faced by independent contractors in the gig economy.  Bloomberg profiled the management and operations of Managed by Q, a gig economy firm that classifies its workers as employees.  Al Jazeera America reported on collective action by low-wage workers at tech economy firms.  And Nikki Fortunato Bas of the Partnership for Working Families in The Huffington Post called for changes in how the gig economy treats workers.

Enjoy OnLabor’s fresh takes on the day’s labor news, right in your inbox.