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One can only hope Uber drivers get declared employees and Mr. Kalanick gets hit with a bill for several hundred million dollars. http://www.vanityfair.com/news/2016/06/uber-class-action-law... I find it hard to believe that the IRS isn't doing this for the workers, for two reasons. Firstly, another component of Uber's business model that wasn't touched on by the video is that Uber/Lyft/Deliveroo and so on effectively force their employees to commit tax fraud by paying far too little, and the IRS of course gets to clean up the mess, but can't go after these employees because there's far too many of them. So it seems logical for me that they'd simply go after Uber, and get an injunction barring them from using workers without an employee contract. Second, the IRS should enforce it's own rules. You are not allowed to be a freelancer if you don't control your own customer relation, and in these cases you clearly have no ability to do so. So working for gig economy businesses is illegal, it's just that the law that makes it illegal is a tax law that is rarely enforced : https://www.irs.gov/businesses/small-businesses-self-employe... Specifically, it's high time Uber gets hit with: Consequences of Treating an Employee as an Independent Contractor
If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply). See Internal Revenue Code section 3509 for more information.
For Uber, this should be a mid-9 figures amount worldwide at least. There's a good chance it would effectively end Uber's business model. And as a non-billionaire, I have to say, that's a good thing. |
Uber is far more "contractor like" than many professions/industries in the US including the very industry it replaces. Cabbies are contractors, yet have far less autonomy than Uber drivers. Same goes for Fedex (ground) drivers.
The fact Uber is the one they are going after is telling and honestly ridiculous; if not downright dishonest and corrupt. You cannot make the argument to me that a Fedex Ground driver who drives a company vehicle, on a schedule set in stone, with a route they must adhere to, while wearing a company uniform is less an employee than an Uber driver using their own vehicle, at the hours they choose, in the locations they see fit.
I could absolutely be convinced that both those conditions meet the employee test - but until I see these huge "legacy" industries who are obviously using middle-layer contractors as a loophole being smacked, I think it's entirely political and has absolutely nothing whatsoever to do with the workers or changing anything.