Peer-to-peer transportation services have changed the landscape for traditional taxi drivers, and now employment laws are going to affect the future of the industry. Uber is available in 53 countries and more than 200 cities worldwide, including the City of Columbus, and was founded in 2009. A rival company, Lyft, was founded in 2012 and was also previously available in Columbus. In January of 2015, Lyft left the Columbus market because of the Columbus City Council making changes to the Business Regulation and Licensing Code. But now, legal questions regarding peer-to-peer transportation and potential changes to the industry are going to the national stage.
Peer-to-peer transportation relies on the classification of drivers as “independent contractors” rather than “employees”. If the drivers can remain independent contractors, Uber and Lyft need not pay them a salary, benefits, provide insurance, gasoline reimbursements, Social Security, unemployment insurance, and workers’ compensation. However, if drivers are found to be employees, then the companies may have to provide some, or all, or the above. On one hand, the classification as an employee could be good for the drivers, as they are likely to make more overall money. On the other, the industry thrives on their low transportation fares, and this change would likely increase the rates for consumers. This classification will have far reaching implications for the peer-to-peer transportation industry.
Uber and Lyft are both currently involved in class action lawsuits to determine whether their drivers are independent contractors or employees. On Wednesday March 11, United States District Judges Vince Chhabria and Edward Chen ruled that juries must decide how Uber and Lyft will be classified. Our firm will be closely watching the outcome of these cases to see if there are changes or clarifications in employment law for classifications of independent contractors and employees.
This status of workers is important to consider for all business. Lardiere McNair LLC has a practice in which advises and assists both employers and employees with their employment concerns. If you have any questions about the above, or independent contractor/employee status, please contact an attorney.
Chad Stonebrook is an Associate Attorney at Lardiere McNair LLC. To read more about Chad, please visit http://www.lmcounsel.com/chads-bio.html.
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