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Comment by gergles | Hacker News Reader

The big example how the relationship is an employment one (IMO) is the integration test from US v. Silk (1947) -- and yes, it's from 1947 so take what you will from that but it is still one of the factors. Uber simply doesn't exist as a product without the drivers. The drivers' "businesses" are so integrated into Uber's product that there is no meaningful distinction that can be drawn there. Courts frown on rules lawyers, which is what Uber is trying to do right now.

There's another 19 prongs that have been used in the past to classify people who are employees as employees. I estimate Uber can only meet 7 or 8 of them, and I don't think that's enough to establish that the drivers are bona fide contractors.

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Your example of United States v Silk[1] doesn't actually help your argument in relation to Uber drivers. Yes, the Supreme Court reclassified the "unloaders of coal using shovels" as "employees" but the majority opinion agreed with the lower court to leave the drivers as "contractors". Relevant excerpt of the decision:

"... But we agree with the decisions below in Silk and Greyvan that, where the arrangements leave the driver owners so much responsibility the investment and management as here, they must be held to be independent contractors.[14] These driver owners are small businessmen. They own their own trucks. ..."

Also, your comment about "The drivers' "businesses" are so integrated into Uber's product that there is no meaningful distinction that can be drawn there" is not a consistent litmus test since many industries depend on people "integrated" into their product. Movie productions hiring freelancers such as stuntmen, soundmen, actors, etc -- who are all "integral" to the product (the film). Or hair salons providing booths to freelance hairstylists. Those hair cutters are "integral" as well.

There are better arguments for reclassifying contractors as employees other than the "integral" test.

[1]https://en.wikipedia.org/wiki/United_States_v_Silk

> ...These driver owners are small businessmen. They own their own trucks. ..."

The Uber case can be distinguished...Uber actually owns the vehicles many of the Uber Driver's operate. (If you are an Uber driver you can have Uber finance you a vehicle). Further, very likely the truck drivers actually own a business entity separate and apart from themselves, I don't think you will find many Uber drivers being paid in the name of a business (not determiniative but a factor in many states).

> Uber actually owns the vehicles many of the Uber Driver's operate

The vast majority of Uber vehicles are owned by the driver.

Are there some that are actually owned by Uber?

I think the answer is most likely "no". And I'd be surprised if it even gets kickbacks from leasing companies since it is already getting nice cars on the road with motivated drivers who have to pay their leases off with earnings.

> If you are an Uber driver you can have Uber finance you a vehicle

Uber doesn't provide the financing. From their financing page (https://get.uber.com/cl/financing/)

"Each participating lender has set requirements for approval and certain items on your credit report may exclude you from eligibility"

Uber just partners with lenders and dealerships, and deducts the money on behalf of the lender.

>Uber just partners with lenders and dealerships

In other words, the Uber drivers ("contractors") don't own their own equipment ("the car") rather Uber's partners name is probably on the title.

While I don't know the answer, should the evidence come out, do you think Uber is making money from their partners financing the equipment to the Uber contractors?

> In other words, the Uber drivers ("contractors") don't own their own equipment ("the car") rather Uber's partners name is probably on the title.

That's now how car financing works.

Financing your car through the company that you work for as an independent contractor it not generally how car financing works.

"Tools and Materials: The furnishing of tools, materials, etc., by the employer indicates control over the worker."

I think that fact that in some instances the company finances the very tools required by the contractor to perform - for this factor - suggests employee, I imagine you still don't.

Luckily from the sidelines we can watch as the various levels of government (federal, state and local) begin to figure it out for all of us. Already California Labor Commissions have ruled an Uber driver as an employee (which Uber is appealing to the CA Courts, so now we will have our first taste of their opinion) and per this article some state legislatures appear to be codifying drivers for TNCs as ICs.

I think you're pretty far off on all of this. Most Uber drivers own their own cars. Uber doesn't do any of the leasing itself, instead sending drivers to 3rd party leasing companies. Uber gets either zero or very little kickbacks since Uber's primary motivation is getting drivers in nice cars on the road. The California decision was by some employment office with no real authority on the case of a single driver and so pretty much irrelevant.

>Uber doesn't do any of the leasing itself, instead sending drivers to 3rd party leasing companies

https://get.uber.com/cl/xchange/ or just Google it, Uber certainly did begin leasing cars. The lease payments go directly to Uber's subsidiary.

>Uber gets either zero or very little kickbacks since Uber's primary motivation is getting drivers in nice cars on the road.

These drivers, as independent contractors, are supposed to provide their own tools/materials to perform, not finance/lease/rent the tools from the company to perform.

>The California decision was by some employment office with no real authority on the case of a single driver and so pretty much irrelevant.

No real authority? I'm assuming you have never run your own company and had a former employee with a complaint with "some employment office".

They found the Uber driver improperly classified as an independent contractor, as a result Uber was ordered to pay the employee's driving expenses of $1,000's. If Uber loses its appeal in court all the sudden that single case becomes precedent for all California Uber drivers.

>https://get.uber.com/cl/xchange/ or just Google it, Uber certainly did begin leasing cars. The lease payments go directly to Uber's subsidiary.

Seems like this discusses "XCHANGE LEASING, LLC", not "Uber Technologies, Inc" or "Uber USA, LLC". I fail to see the relevance.

>These drivers, as independent contractors, are supposed to provide their own tools/materials to perform, not finance/lease/rent the tools from the company to perform.

They aren't

XCHANGE LEASING, LLC is owned by Uber, but either way I am sure you still fail to see the relevance.

>They aren't

Maybe you should tell that to the IRS (and a few states) as that is #14 on their 20 factor test.

XCHANGE LEASING, LLC is not directly owned by Uber. However, it's obviously indirectly controlled by them.

The "They aren't" was in reference to the fact that said contractors aren't directly leasing the cars from Uber.

You're right, I was looking at the wrong page: https://get.uber.com/cl/financing/

I still think the primary goal and profit is made on the core driving service, not the leasing program.

I agree that there certainly could be an argument towards classifying drivers as employees. The fact that the app would not function without drivers is definitely a meaningful one, though it also raises troubling questions over whether Ebay sellers (for example) should also be classified as employees.

Like you said, it's a multi-pronged and complicated test. I actually think Uber could meet a majority of the IRS factors.[1]

Namely:

1. Instructions: Uber does not instruct drivers about when, where, or how to drive.

2. Training: by most reports, Uber provides no training to drivers. (In fact, this is an argument which Uber detractors often use against it.)

3. Services Rendered Personally: as far as I know, Uber doesn't forbid you from hiring your friend to drive your car around with your Uber account open. (HIRING, SUPERVISING, AND PAYING ASSISTANTS might also apply here.)

4. Set Hours of Work: You can drive whenever you want.

5. Full Time Required: You can only drive a few hours a week.

6. Doing Work On Employer's Premise: This test is somewhat less applicable, but Uber doesn't require their drivers to (for example) come to a company HQ at the beginning of their shift.

7. Payment By Hour, Week, or Month: The bulk of driver payments depend on miles driven for customers, not hours "worked."

8. PAYMENT OF BUSINESS AND/OR TRAVELING EXPENSES: Uber does not compensate drivers for any of their (substantial) expenses.

9. FURNISHING OF TOOLS AND MATERIALS: Drivers provide all their own equipment.

10. SIGNIFICANT INVESTMENT: This is arguable, but many drivers are known to buy new cars just to drive for Uber.

11. REALIZATION OF PROFIT OR LOSS: This is definitely plausible. If drivers don't keep a firm grasp on their expenses or spend too much time driving around looking for riders, they can definitely suffer a loss.

12. WORKING FOR MORE THAN ONE FIRM AT A TIME: Uber drivers often simultaneously work for Lyft or other ridesharing services.

This isn't cut-and-dry and we shouldn't treat it as such.

[1] https://www.mdc.edu/hr/Operations/AFS/IRSFactorTest.pdf

1. Instructions: Uber instructs drivers on how to use the app to manage fares, and how to use the app to navigate routes. Generally, the use of other navigational apps was not permitted.

2. Training: Uber trains drivers in how to use their app.

3. Uber forbids drivers from having friends in the car and are expected to behave like livery drivers.

4. (Drivers can work whenever.)

5. (Drivers do not need to work full time.)

6. Drivers are required to display an Uber tag in their windshield while driving, (but are not required to begin and end their work "shifts" at any particular location).

7. Drivers are paid out of Uber's revenues, and not by the customer. This is obvious from the way that Uber prepares its financial statements, wherein all payments from customers are treated as its revenues, and driver's cuts as COGS. (On financial statements, employees are COGS, contractors are generally other expenses.)

8. (Uber does not compensate drivers for their expenses) except for tickets, impound fees, and fines incurred while driving for Uber.

9. Uber provides an app, a windshield decal, navigation services, payment processing services, and deposit services.

10. (Drivers provide their own cars.)

11. (Drivers can incur a loss looking around for riders.) This is actually a big point at the international level when determining whether one company is independent of the other financially, but it generally isn't as much of a factor at other levels.

12. (Drivers work for multiple services.)

The balance favors treating drivers as employees. Indeed, one of the most important factors is that Uber itself characterizes the drivers' income as its own on its financials and tax returns. That will definitely hurt it when the IRS, the same agency that audits the tax returns, needs to make a determination about classifying the drivers.

I feel like you completely missed the point of #3. Does Uber forbid drivers from subcontracting? There'd still be one driver in the car, it just wouldn't be the Uber account holder.

#1 I see drivers use other nav apps all the time. Uber just provides integrated navigation, but I'm pretty sure it's not required. The uber app didn't have navigation for quite a while actually.

#6 is calfornia regulation, not an uber/lyft/whoever requirement. I don't know how it's like elsewhere.

#9 I would compare uber to current taxi independent contractors, which have been standard operating procedure for decades. The taxi driver rents a taxi car with it's attached taxi medallion for a few hundred dollars a day. Anything they make after that is their money. But since the fee is usually very high, they have to work 12 hours day to make something approaching a living. I'm fairly certain the card terminals and the taxi company phone dispatch services come with that rental.

> 1. Instructions: Uber does not instruct drivers about ... how to drive

Whatever gave you that impression? Uber has strict rules about how drivers should behave with customers, or about the maintenance of their car. For example drivers are not allowed to be aggressive in traffic (like taxi drivers), they are not allowed to talk with the client unless the client shows interest in talking, they can't smoke in their car and they are not allowed to reject orders, otherwise they'll suffer a pay cut.

I've talked with multiple drivers that confirmed the above. I also once complained to Uber about a driver that called me to convince me to cancel my order and they replied that the driver was scolded. I have the response in my email to prove it.

As a disclaimer, I'm talking about Uber from Romania, not from the US, but it's the same story, drivers being hired as contractors.

I suppose that's possibly true in Romania (I doubt it, except for the smoking). It's certainly not true in the US (I drive with Uber and Lyft).

The same argument could be made about a bunch of marketplaces though: Ebay, Mechanical Turk, Airbnb, etc.

Well, eBay and AirBnB sellers/hosts are not really selling their labour, but their assets. As for the Mechanical Turk, well...

There's a distinct difference between those "marketplaces" and Uber, and that's that Uber sets the price, not the member. When I Ebay something, I set the price. If I request a HIT on MTurk, I set the price. If I put up a room on Airbnb, I set the price. If I hop in my car and turn on Uber, I don't set the price. Uber does. I would think that setting my own price is a significant test for being a "marketplace".

Also, allowing customers to choose who to go with.

Uber doesn't allow customers to choose a driver; the system assigns one to you. On the other hand, an eBay customer bids on whatever auctions they want to bid on, and they know the seller's identity beforehand.

With eBay, you can go "I had a bad experience with this guy before, so I'll look and see if anyone else is selling this item so I don't have to deal with this person again". With Uber/Lyft, you're stuck with "ugh, the system matched me with this guy, guess I'm going to have to constantly cancel and re-request until I'm matched with someone else" (for the record, I've only had to do this twice in the almost two years I've been using Lyft).

Not really. An eBay seller negotiates their own price with the buyer, independent of eBay. Uber/Lyft set a price, and the driver has no say in it.

Uber drivers are way more cogs then Ebay sellers. They are representing Uber so they are instructed to offer water to the client, say "how are you today sir", etc.

It's encouraged, but they're not instructed to do so.

Plenty of Uber drivers never offer water or say "sir" but remain on the platform.

No they aren't (in the US).

> Courts frown on rules lawyers

The legal equivalent of "rules lawyers" are just plain "lawyers", and Courts don't frown on them as a class.

> Courts frown on rules lawyers

Isn't that the whole business of lawyers - interpreting the laws as they are written, not their intention?

Personally I'm not sure, because it seems like both of you are right. Perhaps it is that lawyers are there to find loopholes but present them as if they aren't.

Last month an Uber driver told me: "I don't work for Uber. I just use their app." The same driver had the Lyft app.

Sure, I've heard the same thing but how a driver views their relationship with Uber is not the same thing with how the law views it.

Last month I heard a McD employee tell me: "Ohh haha, I'm not an all-out McD employee. I'm in just for the spare cash". The same employee also worked in Dairy Queen across the block.

Well yeah, if that's what Uber tells them, that's probably how they would see it.

By that logic, Youtube content creators are employees of Youtube? Bloggers are employees of Google? Home owners are employees of Airbnb?

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