Uber Technologies has been caught up in a legal argument wherein the Company has been trying to prove that its drivers are simply independent contractors and cannot be labelled as employees. This has naturally invited a lot of criticism from all quarters since Uber has clearly generated millions of dollars in revenue due to its drivers and ride-hailing service.
However, the Company prefers to be called a technology platform for a range of digital marketplaces and not a ride-hailing company. With a new California law all set to upset Uber’s source of cheap labour, the Company is coming up with various arguments drawing attention to the way it has diversified into the business of delivering food and freight, and that its drivers are not part of its larger business mission.
A Bill was passed by the California Legislature not long ago, which says that workers in the gig economy will be entitled to a minimum wage and compensation if their work contributes to the usual course of a company’s business. Uber has been avoiding treating its drivers as employees, and has been getting away with paying less. It has successfully managed to have its way using arbitration, litigation and settlements till now. However, the Bill may not let this continue any longer.
A majority of the legal practitioners are confident that the Bill will become a law, and Uber drivers will end up being considered employees, which will entitle them to insurance cover too.
Uber has been complaining that other industries have managed to smartly have their workers exempted from the law, for instance, hair stylists, travel agents, dog groomers and engineers. The Company seems ready for a legal fight to prove that it is a technology company and not a transportation firm. It wants the courts to understand that drivers are not part of its core business, which is to run a technology company that operates a marketplace.