Uber driver wins unemployment benefits

A former Uber driver has been awarded unemployment benefits after being deactivated by the company, SF Weekly reported, a development that could complicate the fight over whether drivers are employees or independent contractors.

Patrick Ely, from the San Diego area, was awarded up to about $9,000 from California’s Employment Development Department last month, according to a document obtained by SF Weekly. Because the award recognizes Ely as an employee of Uber (independent contractors would not receive such benefits), it creates in interesting wrinkle in Uber’s larger legal battle.

Uber is set to go to trial this summer in San Francisco federal court to defend its choice to classify its drivers as independent contractors instead of as employees. Under that business model, Uber doesn’t have to pay its drivers employee benefits such as overtime and minimum wage, or reimburse them for driving expenses. Plaintiffs in the lawsuit argue they are employees because Uber controls their day-to-day work. A ruling against Uber could upset its entire business model, and that of other businesses in the on-demand economy that use independent contractors as drivers or couriers.

In a statement responding to the award, Uber said: “We disagree with the decision, but, since it only affects one person, and does not have any wider impact or set any formal or binding precedent, we continue to focus on the bigger picture: the O’Connor case. Labor Departments in thirteen states – including the California Employment Development Department (EDD) itself – have found individual drivers to be independent contractors.”

It’s true that the unemployment award affects only one driver and has no direct impact on the larger lawsuit, but it still doesn’t look good for Uber’s larger argument that it is a technology company that matches independent drivers and passengers, and not a car service that employs drivers. At the very least, the unemployment award and other similar rulings illustrate the complexity of Uber’s relationship with its workers.

Last year California’s labor commissioner’s office ruled that a different Uber driver is an employee and entitled to employee benefits. The company is involved in every aspect of the process that matches drivers with riders, the office found.

Not all such rulings paint the same picture. A previous ruling by the same office in 2012 concluded that a driver performed services as an independent contractor, and not as an employee.

For more details, check out the San Jose Mercury News story.

Updated above with statement from Uber. 

Photo: A  woman leaves the headquarters of Uber in San Francisco in 2014. (AP Photo/Eric Risberg, File)


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