In Uber business model does not justify a new ‘independent worker’ category, Economic Policy Institute Vice President Ross Eisenbrey and President Lawrence Mishel examine the relationship between Uber and its drivers to show that Uber can and does track workers’ hours in a way that is consistent with their being employees, which suggests that a third legal category of worker is not needed for Uber drivers.
One of the major issues in the development and future viability of popular ride-hailing apps such as Uber and Lyft is whether drivers are considered employees or, as they are now, independent contractors. Recently, former Council of Economic Advisers chairman Alan Krueger and former Deputy Secretary of Labor Seth Harris have called for reconciling this problem by creating a new category of “independent worker.” Harris and Krueger argue that the current legal framework makes it difficult to determine how many hours a gig worker has worked and for whom. They pose the problem of a driver who has apps open for both Lyft and Uber while also conducting personal tasks to highlight the difficulty, in their view, of determining which employer, if any, is responsible for paying for the time spent waiting before a ride is requested.
When Uber drivers have their app turned on, they do not have a multitasking capability that would meaningfully distinguish them from employees or independent contractors. Drivers are expected to accept at least 80 percent of ride requests, and must respond to ride requests within 15 seconds in order to avoid a low acceptance rate, which could cause them to be “deactivated” (i.e., fired). Consequently, rather than being unengaged and not legally required to be paid, Uber drivers are engaged in waiting for requests whenever they are logged in to the system, and should be paid for their time.
“When you look at the realities of being an Uber driver, it is clear that the nature of their work falls under preexisting categories of employment. Yes, Uber drivers are free to turn on the app whenever they’d like, but they are not free to ignore the app when they have it on,” said Mishel. “There is a popular myth that companies like Uber and Lyft represent a huge shift in the relationship between workers and employers. This isn’t the case.”
Both Lyft and Uber track their drivers’ work hours by measuring the time drivers have their apps on, to the minute, and readily identify these hours in public statements. Uber in particular provides its drivers a guaranteed minimum wage program—an indication that the company is already able to follow minimum wage and overtime protections.
“Rather than pursuing legislation to create a new, less protective legal relationship for app workers, a better approach would be simply to establish that these workers are employees protected by labor law,” said Eisenbrey. “The fact that Uber already measures work hours for the establishment of a minimum wage demonstrates its ability to apply the Fair Labor Standards Act in its work relationship with drivers.”
The authors argue that Uber drivers should be compensated for periods when the app is turned on but the driver has yet to receive a ride request, because drivers are engaged to wait for ride requests and it is unrealistic for them to perform other activities while waiting. For models of how Uber could determine a scheme for employee wait-time compensation, Mishel and Eisenbrey point to examples of federal appeals court cases where employee waiting time was found to be compensable. They also offer a solution for the problem of charging for wait time among one or more employers: the company whose ride request is accepted by the driver should pay for the waiting time that precedes the ride.