These Taxi Drivers Are Not Employees Says Massachusetts Supreme Judicial Court

taxi cab

From JDSupra, Jessica Catlow from Mintz Levin discusses the recent Massachusetts case in which the court said that the taxi cab drivers were independent contractors and not employees.  She writes:

Massachusetts has an independent contractor statute that states that any person providing a service is presumed to be an employee, which presumption can be rebutted if the three indicia of an independent contractor are established:  “(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of services and in fact; and (2) the services is performed outside the usual course of the business of the employer; and (3) the individual is customarily engaged in an independently established trade, occupation, professional or business of the same nature as that involved in the service performed.”

The owners first argued that the statute does not apply to the taxicab industry because the industry is separately regulated by the city as a public utility, but the court disagreed.  The owners also argued that the drivers were not providing a service, but rather, the drivers were mere renters of a license.  The court agreed, in part, but then held that even if they were in fact providing a service, the drivers met all three prongs of the independent contractor statute.  As for the first prong, the court held that nearly all of the rules controlling the drivers (e.g. driver’s appearance, cell phone usage, ability to smoke, procedures for obtaining or refusing passengers, standards for treatment of passengers, meter rates, and geographical areas of operating) did not emanate from the owners, but rather they were embedded within the taxi cab statute.  With respect to the second prong, the court held that medallion owners’ leasing business is not directly dependent on the drivers’ success – in fact their businesses are entirely disconnected from their success because, among other things, drivers (unlike in the Uber and Lyft cases), are not required to remit any portion of their revenues to the medallion owners.  Finally, the court also found that the drivers were in a distinct business for themselves – they are free to lease medallions from whomever they chose, use a different dispatch service, accept or not accept a single dispatch or ride request, and advertise for themselves through personalized business cards….”

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