Uber drivers are not employees of Uber, but rather users of the company’s smartphone app. They work their own hours and drive their own cars.
But this didn’t stop the California Labor Commission from ruling the opposite this month in a case involving a litigious driver. She wanted her expenses to be reimbursed by the company, and the labor panel backed her up, ruling that she had actually been an employee of the company during the eight weeks she drove for Uber last summer.
Uber is appealing the ruling, which could undermine its entire business model in the Golden State. But this is more than just another government effort to harass a rideshare company —this is another left-wing assault on the entire concept of the independent contractor.
There is a long history here that predates both the Uber app and the smartphone. For about 80 years, liberals have been working overtime (pun intended) to make the traditional employer-employee arrangement a bad deal for all involved.
Consider, for a moment, mandated employer and employee contributions to Social Security and Medicare; employer contributions to unemployment and disability funds; certain states’ additional taxes on employment; other employer mandates (including but not limited to the one involved in Obamacare); employer liability; union privileges under federal law; and federal rules for non-supervisory employees. All of these add to the transaction costs involved in traditional employment. As a result, if an employer wants her employee to take home a certain amount, her own costs are substantially higher than they would be otherwise, with government and other third parties consuming the difference.
Of course, businesses have not simply submitted to the damage that liberal legislators have inflicted. Innovators reacted through various schemes to decentralize, contract out, or even send offshore as much of their work as possible.
There are hints of this in the franchise structure, by which large corporations effectively subcontract all of their labor hassles and regulatory compliance to small owners. But Uber might be the ultimate example of the minimum-employee business. In fact, the independence of its drivers is an essential part of its innovation. The entire point of Uber is that a driver’s license, a passable car and a smartphone are enough to turn anyone into a part-time or full-time self-employed limo driver with his or her own computerized dispatch service.
As with the Obama National Labor Relations Board’s assault on the franchise business model, this is part of the Left’s broader attempt to stamp out an improvised solution to a problem they themselves caused. The hope is to force businesses back into yesterday’s labor market — and of course, there is no Uber if they succeed, and many other businesses would disappear or become less profitable as well.
Californians will likely pay more for their rides if this ruling is upheld. Unfortunately, their sufferings will probably have to become much greater than that before they start voting differently.
