In Pensacola and hundreds of other cities around the world, it is now possible to get a cab ride without calling up a cab company. Instead, you can go online or use your smartphone app to connect with someone in your community who will give you a ride in his or her own vehicle for a fee. Companies like Uber and Lyft have harnessed the latest technology to create a workforce of community drivers which numbers in the tens of thousands and is growing every day. Something else that is growing is the disenchantment of many Uber & Lyft drivers, who feel they are being exploited by being treated as independent contractors rather than employees. In fact, this disenchantment has grown so much that the issue is currently being litigated in federal court.
This issue is certain to be vigorously contested by both sides in court, since the drivers would much rather be considered employees, and the companies would much rather hire independent contractors. Employees are entitled to benefits such as minimum wage and overtime, family and medical leave, unemployment, workers’ compensation and more. The added expense to the company in payroll costs for unemployment, workers’ comp and social security is considerable. In addition, employees are entitled to expense reimbursement from their employer, whereas independent contractors are not. In the case of transportation companies, expenses such as gasoline, vehicle maintenance and insurance are quite valuable and significant to both sides.
So far, the cases of O’Connor v. Uber Technologies, Inc. and Cotter v. Lyft, Inc. have both survived summary judgment motions by the defendants to dismiss the cases against them. This means the judges believe there are enough legal and factual questions in dispute that a trial should be held on the issues, assuming they don’t settle out of court. Both cases are being heard by different judges in neighboring San Francisco courtrooms, where Uber and Lyft are both headquartered. To read rulings and opinions in the cases as they are issued, visit the Northern California U.S. District Court and look for Cases of Interest on the right-hand side of the page.
Complicated Tests to Determine Independent Contractor Status
Although the cases are currently being litigated in federal court, any decisions reached will only affect Uber and Lyft drivers in California. The judges are analyzing the question under California law, which provides a dizzying array of tests and factors to determine whether someone is an employee or independent contractor. But the issue is not much clearer in Florida, either. Neither the state nor the federal courts here have adopted a single, simple test to determine a worker’s status. Some key factors often used are who controls the way in which the work is performed, and who supplies the materials for the work. In the Uber and Lyft cases, there may be arguments on both sides:
Arguments in Favor of Independent Contractor Status:
- Drivers use their own vehicles
- Drivers decide when to work
- Drivers decide where to go and who they pick up
Arguments in Favor of Employee Status:
- Company sets compensation rates
- Company sets vehicle standards
- Company can terminate drivers at will
What do you think?
Uber clearly wants you to think you are an independent contractor and constantly drives that point home on its website. But when it comes to exemptions from overtime under the Fair Labor Standards Act (FLSA), the courts have made it clear that it is not what the employer says that is important; it’s what the worker actually does. What do you think? If you are an Uber driver in Pensacola and feel the company is exploiting you, you may want to discuss the matter with an experienced wage and hour attorney. At the Law Offices of J.J. Talbott, our labor and employment lawyers represent workers who are misclassified as independent contractors when they are actually entitled to overtime. Call our office at 850-437-9600, or contact us online for a free case review.