Update: This post has been updated to reflect that the decision applies only to the one driver considered in the decision.
California's Labor Commission ruled Wednesday that an Uber driver in the state should be considered an employee.
This is a potentially huge blow to the company, as its business model relies on using independent contractors, for whom it does not pay benefits or employment taxes.
The ruling reads, in part, "Defendants [that's Uber] 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 reality, however, is that Defendants are involved in every aspect of the operation."
Other than not owning the cars drivers operate, Uber more or less controls every step of how its company operates. Therefore, California's labor commisison says that make the driver, Ann Berwick, its employee.
This could bolster the case for the ongoing class-action lawsuit against Uber from drivers who claim they should be treated as employees.
If it's ruled that all California Uber drivers are employees, it's time for them to organize. If they want to protect their jobs, they really have no choice.
Here's why:
- In the short term, Uber may start shedding employees it can no longer afford.
- In the medium term, there's almost definitely a wage pinch coming. Uber has shown that it has little respect for maintaining its fares — it keeps cutting them to the detriment of drivers. The only way that drivers stand a chance of protecting their income is to come at the company as an organized group.
- In the long term, Uber drivers face an automation problem. Driverless cars are coming. Maybe not this decade, but certainly in this lifetime. A union won't be able to stop that process, but it can be a big help as it happens. Anything human drivers can do to protect their jobs is a good thing.
And Uber drivers, in fact, have actually already started the process toward unionizing.
They already have some experience organizing. The California App-Based Drivers’ Association (CADA), was established in 2014. Last August, the group met with the Teamsters Local 986 in El Monte, California.
According to the Teamsters, "After Uber management flatly refused to sit with members of CADA’s steering committee, and privately stated that it does not, and will not recognize any association that seeks to speak on behalf of drivers, CADA reached out to Teamsters Local 986 for organizational and lobbying assistance."
If California drivers are employees, they have the right to organize under National Labor Relations Act.
And the time to do it is as soon as possible.
