The Uber Drive: Self-Driving Cars Could Create More Uncertainty with Gig Economy's 'Independent Contractors'

AuthorMark Yurich
PositionJ.D. Candidate, American University Washington College of Law 2018
Pages36-37
36 Sustainable Development Law & Policy
The Uber Drive: Self-Driving CarS CoUlD
CreaTe More UnCerTainTy wiTh gig eConoMyS
“inDepenDenT ConTraCTorS
Mark Yurich*
The growth of internet enabled devices and web appli-
cations has outsourced much of the work that humans
use to do every day.1 A few taps on a smart phone can
quickly summon services from a personal driver, a grocery
shopper, a masseuse, and even a dog walker.2 While tech com-
panies set up the infrastructure for these services, real people
carry out and complete these tasks.3 But as these companies
advertise that workers can “make great money,”4 their workers
are left without basic employment rights and benets (e.g., mini-
mum wage) because they are hired as independent contractors.5
Self-driving cars will allow companies like Uber to move away
from human workers and avoid the claims that their workers are
employees.6 As claims against these big ride-hailing companies
pushed for a more concrete determination of worker status in
the gig economy, the shift to self-driving cars will ease this push
and leave uncertainty that will still need to be addressed as more
companies adopt this independent contractor model.7
To increase efciency and prot, many of these tech compa-
nies like Uber are moving toward an autonomous future where
there is no worker and where machines such as self-driving cars
complete the services.8 Despite the rapid implementation of this
technology, for the time being, these companies must continue
to work and grow with human workers.9 However, these gig
economy workers are bringing their companies to court for
higher pay, increased rights, and fairer company policies.10 In
these cases, the workers are seeking reclassication from inde-
pendent contractors to employees under the Fair Labor Standards
Act and other state law in order to receive employment benets,
including minimum wage and overtime protection.11 In con-
sidering whether the worker is an independent contractor or an
employee, courts apply a “control test.”12 Under this balancing
test, workers are independent contractors when they supply their
own equipment; set their own hours; and receive pay per project,
not per hour.13 Conversely, workers are employees when the
employers control how the work is done, determine the hours
involved, and provide the worker with direction.14 Economic
realities can also aid the determination by seeing if the worker
is “exhibiting entrepreneurial activity,” or is nancially depen-
dent on the employer.15 There is no obvious determination for
gig economy workers because the control test factors can be
weighed differently according to the specic business model.16
If the courts do not make a concrete determination for a com-
pany’s workers, the Internal Revenue Service or the National
Labor Relations Board could also step in and make their own
separate, but appealable, decisions.17
While some courts have initially ruled that the workers
are employees and not independent contractors, these cases
settled with prejudice, and thus left no nal determination on
the status of their workers.18 Uber has not had this luck in
the United Kingdom, where courts not only ruled that Uber
workers were employees, but also removed Uber’s license to
operate.19 Additionally, the United Kingdom has also publicly
announced plans to “bolster” gig economy workers’ rights.20
This court determination together with the United Kingdom’s
proposed regulations may cause the gig economy in the United
Kingdom to shrink because these companies rely on low labor
costs to maintain their businesses.21 As Uber appeals the United
Kingdom’s 2017 determination, it has begun subsidizing sick-
ness and accident coverage for its workers in an effort to reobtain
approval to legally operate in the United Kingdom.22 Although
there is no rm decision on the employee or independent con-
tractor issue in the United States, companies like Uber are taking
similar steps to appease their employees and local governments
through settlement agreements, policy changes, and lobbying.23
One proposed solution for this employment dilemma
includes creating a new hybrid classication for these work-
ers that affords them some benets (i.e., the right to organize,
collective bargaining, and Title VII protections) while exclud-
ing other ones (i.e., minimum wage or overtime).24 This new
classication could also discourage specic companies from
going beyond these minimum rights that have otherwise resulted
from litigation and settlement proceedings.25 The work from
these companies is inherently risky because the supply and
the ultimate pay for work is dependent on the demand of the
area; therefore, the work is fundamentally unstable and the pay
is variable.26 There is a precarious line that courts and regu-
lators need to balance regarding the specic rights they would
grant these workers, if any. If rights like minimum wage were
mandated for the gig economy, there could be opportunities for
workers to take advantage of the companies under their current
business models.27 With this risk in mind, companies may then
need to change how independent these workers can be. These
companies also may not be able to sustain their attractive prices
to cover the cost of these new rights to their workers.28
Granting gig economy workers employment status would
likely cause companies to assert more control over the work and
grant less freedom to the workers. For example, Uber could
*J.D. Candidate, American University Washington College of Law 2018
224813_AU_SDLP_Spg-Sum18.indd 36 10/18/18 1:53 PM
37
Spring/Summer 2018
mandate stricter ride acceptance rates to avoid drivers having the
app open and earing minimum wage while not accepting rides.29
Uber could also enforce stricter driver ratings to ensure a high
quality of service.30 If a new designation of workers between
independent contractors and employees is created, then some
rights would be granted to the workers, but companies may then
have less incentive to offer more or different benets.31 In the
ultimate determination, there should also be some consideration
to the nature and independence this type of work brings, espe-
cially when some workers want to stay independent contractors
to maintain their job exibility.32
The threat that gig economy business models will be over-
turned by requiring companies, like Uber, to give their workers
more rights could push these companies to accelerate their move
towards a more autonomous future (e.g., self-driving cars), and
thus leaving their human workers behind.33 Although the tech-
nology for self-driving cars still needs improvement, its imple-
mentation is currently ahead of its regulation, and Congress and
state legislatures are working toward the adoption of self-driving
cars.34 Regardless of the motivations behind their adoption,
these employment law considerations will not disappear with the
introduction of self-driving cars.
Once people can take rides from self-driving cars, it is
likely that there will still be human drivers in these companies
for many years.35 Even if the drivers get phased or priced out,
other smaller and less newsworthy companies that offer services
through other app-based business platforms, like Instacart or
Postmates, will still require human workers for some time after
self-driving cars are prolic.36 While there is some hope for
huge companies like Uber and Lyft to avoid this worker classi-
cation issue,37 other businesses in the gig economy will develop
under this business model because it is attractive.38 Therefore,
this employment issue should be denitively addressed by either
courts or legislation because it will not go away when cars can
replace human drivers.39
EndnotEs
1 Jeff Schwartz et al., The gig economy: Distraction or Disruption, dEloittE
insights (Feb. 29, 2016), https://www2.deloitte.com/insights/us/en/focus/
human-capital-trends/2016/gig-economy-freelance-workforce.html.
2
UbEr, https://www.uber.com/ride/ (last visited Apr. 2, 2018); instacart,
https://www.instacart.com/ (last visited Apr. 2, 2018); soothE, https://www.
soothe.com/ (last visited Apr. 2, 2018); rovEr, https://www.rover.com/ (last
visited Apr. 2, 2018).
3
Jeremias Prassl, Are Uber, Mechanical Turk, and other ‘Crowdwork”
Platforms Employers?, U. oxford fac. l. (Feb. 27, 2017), https://www.law.
ox.ac.uk/research-and-subject-groups/research-collection-law-and-technology/
blog/2017/02/are-uber-mechanical (stating that these platforms link the workers
to customers for each “gig,” or job to be performed and the workers are man-
aged through customer rating).
4
Drive with Uber, UbEr, https://www.uber.com/a/
us/?var=org2&exp=70622_t2 (last visited Apr. 2, 2018); How Much Does an
Uber Driver Make in 2018 [The Inside Scoop], ridEstEr, https://www.ridester.
com/how-much-do-uber-drivers-make/ (last updated Mar. 5, 2018) (detailing
the incentives that Uber uses to entice more people to become drivers).
5
Miriam A. Cherry, Beyond Misclassication: The Digital Transformation
of Work, 37 comp. lab. l. & poly J. 577, 578 (2016) [hereinafter Beyond
Misclassication].
6
See Miriam A. Cherry, Are Uber and Transportation Network Companies
the Future of Transportation (Law) and Employment (Law), 4 tEx. a&m l.
rEv. 173, 177 (2017) [hereinafter Uber Future].
7
Nicole Fallon, The Growth of the Gig Economy: A Look at American
Freelancers, bUs. nEws daily (Nov. 10, 2017), https://www.businessnewsdaily.
com/10359-gig-economy-trends.html (stating that jobs in the gig economy are
increasing due to innovation, because companies want “exible talent” and
because workers desire more exible work schedules).
8
Peter Holley, Uber signs deal to buy up to 24,000 autonomous vehicles
from Volvo, wash. post (Nov. 20, 2017), https://www.washingtonpost.com/
business/economy/uber-signs-deal-to-buy-24000-autonomous-vehicles-from-
volvo/2017/11/20/d6038f28-ce2a-11e7-81bc-c55a220c8cbe_story.html?utm_
term=.157f75c8f06b; Andrew J. Hawkins, Ford and Lyft will work together
to deploy autonomous cars, vErgE (Sept. 27, 2017, 11:14 AM), https://www.
theverge.com/2017/9/27/16373574/ford-lyft-self-driving-car-partnership-gm.
9
Timothy B. Lee, Driverless cars became a reality in 2017 and hardly
anyone noticed, ars tEchnica (Dec. 26, 2017, 10:02 AM), https://arstechnica.
com/cars/2017/12/driverless-cars-became-a-reality-in-2017-and-hardly-
anyone-noticed/; Andrew J. Hawkins, Lyft is now offering self-driving car
trips in Boston, vErgE (Dec. 6, 2017, 4:46 PM), https://www.theverge.
com/2017/12/6/16742924/lyft-nutonomy-boston-self-driving-car.
10
O’Connor v. Uber Techs., 82 F. Supp. 3d 1133 (N.D. Cal 2015); Beyond
Misclassication, supra note 5, at 584-85 (listing past litigation in the “On-
Demand Economy”).
11
Miriam A. Cherry & Antonio Aloisi, “Dependent Contractors” In the Gig
Economy: A Comparative Approach, 66 am. U. l. rEv. 635, 644 (2017) [here-
inafter Dependent Contractors].
12
Uber Future, supra note 6, at 185.
13
Beyond Misclassication, supra note 5, at 581-82 (describing factors that
weigh for and against a determination as an independent contractor).
14
Id. at 185-86.
15
Id. at 186.
16
Id.; Dependent Contractors, supra note 11, at 645 (stating that the North-
ern District of California, which hosted several of these cases, made a weak test
with an uncertain outcome).
17
See FedEx Home Delivery v. NLRB, 849 F.3d 1123, 1128 (D.C. Cir.
2017) (reversing the NLRB’s determination that FedEx delivery drivers are
employees).
18
Marisa Kendall, Lyft off the hook in driver case, 3 years and $27 mil-
lion later, mErcUry nEws (Mar. 16, 2017), https://www.mercurynews.
com/2017/03/16/lyft-off-the-hook-in-driver-case-3-years-and-27-million-later/
(stating that the settlement of the case Cotter v. Lyft prevents a determination
on the classication of their drivers).
19
Rob Davies, Uber loses appeal in UK employment rights case, thE gUard-
ian (Nov. 10, 2017), https://www.theguardian.com/technology/2017/nov/10/
uber-loses-appeal-employment-rights-workers.
20
Natasha Lomas, UK outs plan to bolster gig economy workers rights, tEch
crUnch (Feb. 7, 2018), https://techcrunch.com/2018/02/07/uk-outs-plan-to-
bolster-gig-economy-workers-rights/ (stating that even “casual and zero-hour”
workers would receive immediate benets including holiday and sick pay).
21
Sarah Kessler, The Gig Economy Won’t Last Because It’s Being Sued to
Death, fast company (Feb. 17, 2015), https://www.fastcompany.com/3042248/
the-gig-economy-wont-last-because-its-being-sued-to-death.
22
Jane Croft & Sarah O’Connor, Uber set for landmark UK employment
case ghtback, fin. timEs (Sept. 24, 2017), https://www.ft.com/content/
c690eba2-9f96-11e7-8cd4-932067fbf946; Enrique Dans, The evolution of
the taxi: Didi Chuxing puts its pedal to the metal, mEdiUm (Apr. 29, 2017),
https://medium.com/enrique-dans/the-evolution-of-the-taxi-didi-chuxing-
puts-its-pedal-to-the-metal-f57901408304; Robert Booth, Uber to offer
UK drivers sickness cover in return for a £2-a-week fee, thE gUardian
(Apr. 27 2017), https://www.theguardian.com/technology/2017/apr/27/
uber-to-offer-uk-drivers-sickness-cover-in-return-for-2-a-week-fee.
continued on page 48
224813_AU_SDLP_Spg-Sum18.indd 37 10/18/18 1:53 PM

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT