Uber just notched a win in Florida

Who do you work for?
Who do you work for?
Image: Reuters/Shannon Stapleton
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Two Uber drivers in Florida are independent contractors, not employees, the state’s Department of Economic Opportunity (DEO) said on Dec. 3. Add that to the win column for Uber, which has been canvassing the US to convince judges, regulators, and policymakers that the people driving on its platform should not be considered traditional employees.

Florida’s DEO agrees in no uncertain terms.

“The technology is novel and the economic transformation is important, but the law is straightforward,” an order issued Thursday states. “The transportation providers at issue here were independent contractors, not employees, of Uber.”

Uber’s victory here is limited in that it only applies to the two drivers in the case; it’s not a sweeping ruling on the status of all Uber drivers in Florida, according to the DEO. Nonetheless, the order could give Uber ammunition in its broader argument against treating drivers as employees.

“This decision recognizes that Uber’s partners are independent contractors who use Uber on their own terms,” the company said in a statement on Thursday. “They control their use of the app, deciding when and for how long they drive, and whether they drive at all.”

The employment status of drivers is a big concern for Uber, and one with vast legal and economic implications. Employees are entitled to a host of benefits and job protections that independent contractors aren’t; in the Florida case, the two drivers at issue were ruled ineligible for unemployment insurance. Largely because of this, building a platform of contractors can translate to tremendous savings on labor costs for companies like Uber—one estimate puts those savings at 30%.

Change that employment structure, and Uber’s lean operation suddenly isn’t looking quite so lean anymore. It’s something worth remembering whenever you hear the latest valuation hype around firms in the so-called sharing economy. (Uber is also reportedly seeking new funding that would make it worth more than General Motors).

Uber’s biggest hurdle in the debate over its drivers’ employment status is a class-action lawsuit in California. That case is scheduled for trial in June 2016 after a judge declined earlier this year to rule on the question of whether Uber drivers were employees or contractors, calling the issue not “unambiguous.”

Separately, the California Labor Commissioner found over the summer that one Uber driver, Barbara Ann Berwick, should be classified as an employee rather than an independent contractor and awarded her about $4,000 in unpaid expenses. (Uber appealed.) A smattering of rulings in other states are split on the issue.

The point is, whether Uber drivers are independent contractors or employees is nothing if not complicated. And that’s where Thursday’s decision in Florida feels most off. “The law is straightforward,” the order states. Later, on Uber’s contract with drivers: “The Agreement could not be more straightforward.”

If it’s that straightforward, though, why is the question so divisive across America? Why is there an ongoing debate over what should be considered most strongly in determining employment status—the flexibility of the worker, the control exerted by the platform, and so on?

Really, the only thing that’s straightforward is that none of this is straightforward at all.