Navigating the Uber Economy

36 Pages Posted: 22 Sep 2015 Last revised: 18 Apr 2016

See all articles by Benjamin Means

Benjamin Means

University of South Carolina School of Law

Joseph Seiner

University of South Carolina School of Law

Date Written: 2016

Abstract

In litigation against ride-sharing companies Uber and Lyft, former drivers have alleged that they were misclassified as independent contractors and denied employment benefits. The companies have countered that they do not employ drivers and merely license access to a platform that matches those who need rides with nearby available drivers. At stake are the prospects, not only for Uber and Lyft, but for a nascent, multi-billion dollar "on-demand" economy.

Unfortunately, existing laws fail to provide adequate guidance regarding the distinction between independent contractors and employees, especially when applied to the hybrid working arrangements characteristic of a modern economy. Under the Fair Labor Standards Act and analogous state laws, courts consider several factors to assess the "economic reality" of a worker's alleged employment status; yet, there is no objective basis for prioritizing those factors.

This Essay argues that the classification of workers as independent contractors or employees should be shaped by an overarching inquiry: how much flexibility does the individual have in the working relationship? Those who can choose the time, place and manner of the work they perform are more independent than those who must accommodate themselves to a business owner's schedule. Our approach is novel and would provide an objective basis for adjudicating classification disputes, especially those that arise in the context of the on-demand economy. By reducing legal uncertainty, we would ensure both that workers receive appropriate protections under existing law and that businesses are able to innovate without fear of unknown liabilities.

Keywords: Uber, Lyft, employment law, corporate law, employee, independent contractor, on-demand economy, worker classification

Suggested Citation

Means, Benjamin and Seiner, Joseph A., Navigating the Uber Economy (2016). 49 U.C. Davis Law Review 1511 (2016). Available at SSRN: https://ssrn.com/abstract=2663350

Benjamin Means

University of South Carolina School of Law ( email )

1525 Senate Street, Room 314
Columbia, SC 29208
United States
(803) 777-3616 (Phone)

HOME PAGE: http://sc.edu/study/colleges_schools/law/faculty_and_staff/directory/means_benjamin.php

Joseph A. Seiner (Contact Author)

University of South Carolina School of Law ( email )

1525 Senate St., Rm. 339
Columbia, SC 29208
United States
(803) 777-5569 (Phone)
(803) 777-2368 (Fax)

HOME PAGE: http://www.law.sc.edu/faculty/seiner/

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