Are Uber Drivers Entitled to Workers' Comp?
One wonders if Uber can survive today's regulation state. Apparently, Uber drivers in California, driving their own cars and working their own hours, believe they should be considered employees rather than independent contractors. If California courts agree, they will be entitled to workers' compensation benefits. They might win in court, but will they still have jobs if they do? From Business Insurance:
In separate lawsuits filed in U.S. District Court in San Francisco, plaintiffs seeking to represent Uber and Lyft drivers nationwide base their allegations on California's labor law, since both Uber and Lyft reference the state's law in their driver contracts, said Shannon Liss-Riordan, a plaintiff attorney in both cases and a partner at Lichten & Liss-Riordan P.C. in Boston.
Judges in both cases have limited the potential classes to drivers in California, but Ms. Liss-Riordan said those decisions likely will be appealed.
She said Uber and Lyft have shifted costs, such as auto insurance and fuel costs, onto drivers by classifying them as contractors. By making them employees, Uber and Lyft likely would have to pay such costs, as well as provide workers comp coverage and other work-related benefits.
“They save enormously on various labor costs and the drivers are losing out by the companies misusing this independent contractor label,” Ms. Liss-Riordan said. “As employees, the drivers would be entitled to the various benefits of the wage laws as well as protection for unemployment if they lose their jobs or workers comp if they get injured in their jobs.”
If Uber and Lyft drivers are deemed employees, the companies would need to evaluate providing workers comp cover, said Lori Lovgren, Boca Raton, Florida-based state relations executive at the National Council on Compensation Insurance Inc.
“It would be an additional cost that these ride-sharing companies would bear,” she said.
I am usually skeptical of the independent contractor argument, but it strikes me that the facts support Uber's contention that these drivers are contractors rather than employees. But, California courts may disagree. Will Uber simply pay for Workers Comp for these CA drivers? I doubt it. Hence, Uber's CA days may be numbered.