Uber Drivers And The Blurred Line Between Employees and Contractors


The California Labor Commission recently determined that an Uber driver was an employee rather than an independent contractor, generating national headlines today. In essence, the California decision states that Uber is a taxi service, and that the drivers of a taxi service are employees under California law, because they are integral to the service the taxi service performs.  The potential implications for Uber are significant.  Uber could face tens of millions of dollars of litigation if this precedent stands in California.  Furthermore, many of the advantages of its technological business model versus a typical taxi company would virtually disappear.

So far, Uber is known to have successfully fought off proceedings attempting to classify its drivers as employees in five jurisdictions including, Texas, Pennsylvania, and Georgia.  Uber has lost a proceeding regarding this issue in one other state, Florida.  It seems likely that jurisdictions and courts will be split on this issue.

The final disposition of this case will be important to the development of the law and its interaction with technology.  We can imagine a world where it is the norm for many workers including most office workers to work on their own schedule while being monitored by technology. These workers could plausibly control their own schedules working when and where they want as long as they meet deadlines. Will these workers who work on their own schedule, from their own location, with their own phone, computer, and internet connection, with little supervision of their work be properly classified as independent contractors?  The only certainty is that the line between independent contractor and employee will continue to blur in the face of technology.

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