From Eremedia, Richard Meneghello and John Poison discuss the Uber settlement in which Uber agreed to make changes to benefit drivers but drivers remained independent contractors. Richard and John write:
Specifically, the deal calls for:
- “For cause” deactivation: Currently, Uber drivers can be removed from service (or “deactivated”) for just about any reason, including receiving low scores from riders. Under the agreement, Uber will need to demonstrate “sufficient cause” to release its drivers from service, and will need to provide a written explanation to the drivers. A low acceptance rate will not satisfy the standard, but reasons involving safety, fraud, discrimination, and illegal conduct will.
- Appeals process and arbitration: If a driver believes that the deactivation is improper, the settlement agreement permits an appeals process overseen by fellow drivers. If not satisfied, the driver can initiate an arbitration proceeding that Uber will pay for.
- Driver Association: Drivers will now be able to elect local leaders who will meet with Uber management at least quarterly to dialogue about any number of issues impacting the workforce. This Association will not be a union and will not have the right to collectively bargain for employment rights or pay. Although the National Labor Relations Board might not approve of this arrangement and claim it violates the Labor Act’s prohibition on meet-and-confer associations, Uber can point out that the drivers are independent contractors who cannot use the NLRA as a weapon against them.
- Tips: The agreement will ensure that drivers have the opportunity to collect tips from riders. While Uber users will still be told that tipping is neither expected nor required, customers will also be told that tips are not included in payments and drivers will be able to put up signs or otherwise request tips from riders.
From a bigger picture perspective, this deal further presages the possible emergence of a new third classification of worker that reflects the reality of working in the gig economy in the 21st century. Modern businesses have long bemoaned the fact that the current legal standard is based on a 20th century legal test and calls for sorting workers in one of only two categories: either employees or independent contractors. As some legal scholars have pointed out, when it comes to sharing economy business models, this is sometimes like trying to take a square peg and jamming it into either one of two round holes.
As a possible solution, some have called for the recognition of a hybrid third category, the “dependent contractor,” or the “independent worker.” This worker would have some characteristics of an employee while retaining the independence of a contractor, permitting both worker and business the necessary flexibility to remain nimble in the modern business environment.
While this settlement agreement does not alter existing law or create such a legally binding category, it is a definite step in the right direction. Government regulators and elected legislators will take notice of this proposed solution and could see it as a model for developing laws covering gig economy working relationships.
Read the full story at Is The Uber Deal A Step Toward A Third Worker Classification?