The Journal Record - September 3, 2015
Gov. Mary Fallin signed a bill May 8 designed to provide a comprehensive regulatory framework for Oklahoma’s ride-booking industry. The bill requires that Uber, Lyft and similar services run background checks on their drivers, enforce anti-discrimination and zero-tolerance drug and alcohol policies, and carry $1 million in primary insurance coverage for each ride. Although this bill clarifies some gray areas surrounding this rapidly growing industry, it doesn’t provide guidance as to whether ride-booking service drivers are classified as employees or independent contractors. Other states have wrestled with this issue, reaching widely differing conclusions.
Founded five years ago, Uber allows customers in select metropolitan areas to submit a trip request via mobile app. This request is routed to an Uber driver, who uses his personal car for transportation.
Ride-booking services have traditionally classified their drivers as independent contractors for purposes of compliance with relevant state and federal employment laws. The services argue that their drivers are not employees because they own their own cars, set their own schedules, and can drive for multiple services in the same time period. In recent court filings, however, some drivers argued they should have been compensated and protected as employees because their work is the primary revenue stream for the ride-booking companies, the companies have a great deal of power (including fining authority) over how a driver conducts his services, and many drivers provide rides as a full-time or near-full-time occupation.
The California Labor Commission recently ruled that Uber incorrectly classified a former Uber driver as an independent contractor. The plaintiff sued when Uber rejected her claim for reimbursement of nearly $4,000 of business-related expenses. The commission sided with the driver and ordered Uber to reimburse incurred costs.
Class-action lawsuits have recently been filed over this classification issue in California, Massachusetts and Florida. The California decision is not binding precedent for these lawsuits or any future lawsuits that may be filed in Oklahoma. Yet its ruling – the first to find that a ride-booking service driver is an employee – may be persuasive to other courts and administrative agencies wrestling with how to define this and other similar unconventional relationships, which are central to the operations of rapidly expanding on-demand companies like Airbnb, TaskRabbit, and food delivery services.
This article appeared in the September 3, 2015, issue of The Journal Record. It is reproduced with permission from the publisher. © The Journal Record Publishing Co.
