The California Labor Commission ruled today
that an Uber driver should be given the status of employee, not
contractor, and ordered the company to pay her $4,152.20 in business
expenses for time she worked as an Uber driver in 2014. If this ruling
is repeated in upcoming court cases, it could mean Uber would need to
provide its drivers with benefits like health insurance and overtime
pay. The company could also be on the hook for payroll tax, unemployment
insurance, workers’ compensation, and state taxes.
All that would drastically reduce the profitability of the
fast-growing startup's current business model, which has powered it to a
$40 billion valuation and massive global reach. "With a business model
based on offering affordable fares, these companies may not be able to
survive a ruling against them in this area," argued Jennifer Robles
of Owen Dunn Insurance. "Without contractor status, it’s likely these
companies could not continue at a profit, leaving traditional taxi
drivers decidedly happier and thousands of Lyft and Uber drivers out of
work."
No comments:
Post a Comment