Gig News: Uber Successfully Pursuing State Legislation on Independent Contractor Status

Today Reuters published an important story noting efforts by Uber to lobby for state legislation requiring that drivers for companies like Uber and Lyft be classified as independent contractors.  They found that North Carolina, Arkansas, and Indiana have already passed laws mandating that drivers working for “transportation networking companies” (like Uber and Lyft) be classified as independent contractors.  Ohio and Florida are moving toward passing similar regulations.

In these five states, a court would be precluded from ruling that drivers must be classified as employees by applying common law worker classification tests, as a California federal court might next year.  Legislation has also been introduced but not enacted in Alabama and New Jersey.

Uber’s effort to push for the state legislation is notable:

An Uber spokeswoman said the company supported the Arkansas, Indiana and North Carolina laws, as well as the pending Ohio and Florida bills.

She declined to comment on the company’s involvement in drafting those laws, however.

In Ohio, state Rep. Bob Hackett said Uber, Lyft, the taxi industry and other parties were involved in drafting the bill.

At one point, Uber sent five representatives to a meeting with members of the insurance industry to negotiate language in the bill, Hackett said.

States began passing laws regulating “transportation networking companies” in 2013 in response to the rise of Uber, Lyft and other companies offering on-demand driver services via phone apps.  Per Reuters, “Twenty seven states, and the District of Columbia, have established regulations for transportation network companies (TNCs), according to a tally from the Property Casualty Insurers Association of America.  Bills are pending in at least five other states.”  While many of the regulations are standard, the practice of mandating a certain worker classification is uncommon according to one expert:

J.H. Verkerke, an employment law expert at the University of Virginia School of Law, said it was very unusual for legislation governing things such as safety and insurance to weigh in on the labor practices of companies.

“That’s something legislators have rarely ever taken up, at least not in the open,” Verkerke said. “Usually it just gets kicked to the courts.”

To Shanon-Liss Riordan, the attorney representing gig economy workers in several prominent worker classification suits (including the aforementioned California case), the state laws work against workers’ rights:

Shannon Liss-Riordan, who represents drivers in the California class action, said these provisions “dock” workers’ rights.

“It is somewhat scary they are trying to bury that provision in the legislation,” she said.