Abstract
As the gig economy continues to grow, the legal status of its workers remains a source of confusion and controversy. Uber and other transportation network companies (TNCs) typically disclaim employee status, depriving drivers of social insurance among other benefits. Further, such companies typically deny liability to third party victims for damages due to auto accidents, sexual assaults, and other negative outcomes arising out of their business. Legal and regulatory systems in the U.S. and elsewhere continue to struggle with how to determine and apply a consistent standard as to employee classification. We argue that corporate social responsibility should figure prominently in the equation. Private companies already are required to cover social costs of doing business in a variety of contexts (e.g., workers compensation, family leave, public and workplace accommodations for disabled individuals), and it makes sense that they also should be required to underwrite other important implications associated with employee status as part of their responsibilities to society. This is especially so where, as with Uber and other TNCs, a company’s core profit-making operations include activities that carry the direct potential for causing substantial harm both to individual clients and to the public at large.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
A recent British court decision has resulted in Uber being granted only probationary licensing status due to the company’s failure to run adequate background checks or report crimes involving its drivers as required by law (https://www.reuters.com, downloaded 6/25/18).
Uber, originally called “UberCab,” now asserts that it is only a provider of “mobile applications and related services” and is not a provider of “transportation, logistics, or delivery services” (https://www.uber.com/, downloaded 7/1/18).
The ABC test had previously been utilized elsewhere, but largely in determining entitlement to unemployment insurance compensation. See the full text of the Dynamex decision for further detail.
As reviewed in detail elsewhere, there also have been rulings by various state labor relations agencies (see, e.g., Keeton 2016). These decisions have limited applicability beyond their specific jurisdictions and are not considered in our analysis.
An analogous case against Uber’s main competitor, Lyft, was settled by the parties and provides little useful guidance in the present inquiry. See Cotter v. Lyft (N. D. Cal. 2017).
A proposed settlement of this litigation was rejected by the court, but the case was stayed pending appeal to the 9th Circuit on the issue of whether class action waivers in arbitration clauses signed by the drivers are enforceable.
There is, of course, a question whether the first type of enterprise really exists to reduce consumption via sharing things like books (Booksfree), toys (ToysTrunk), or clothes (Le Tote) or is more concerned with “sharewashing”—emphasizing claims of having a social mission or social responsibility in order to soften what otherwise might appear to be a purely cutthroat profit motive.
See generally, Kaardal and Bjornson (2018).
References
Alexander v. Fedex Ground Package System, Inc. (2014) 765 F.3d 981 (9th Cir. 2014).
Andoyan, A. (2017). Independent contractor or employee: i'm Uber confused: why California should create an exception for Uber drivers and the on-demand economy. Golden Gate UL Rev. 47, 153.
Bales, R. A., & Woo, C. P. (2016-2017). The Uber million-dollar question: Are Uber drivers employees or independent contractors. Mercer L. Rev., 68, 461.
Bennett-Alexander, & Hartman. (2018). Employment Law for Business. Bennett-Alexander, D.D. & Hartman, L.P., McGraw-Hill, 9th Ed.)
Berger, T., Chen, C., & Frey, C. B. (2017). Drivers of disruption? Estimating the Uber effect. Working paper.
Borello & Sons v. Department of Industrial Rel., 769 P.2d 399, 48 Cal. 3d 341, 256 Cal. Rptr. 543 (1989).
Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39–48.
Carroll, A. B. (2015). Corporate social responsibility: The centerpiece of competing and complementary frameworks. Organizational Dynamics, 44(2), 87–96.
Carroll, A. B. (2016). Carroll’s pyramid of CSR: Taking another look. International Journal of Corporate Social Responsibility, 1(1), 3.
Clewlow, R., & Mishra, G. (2017). Disruptive transportation: The adoption, utilization, and impacts of ride-hailing in the United States. Institute of Transportation Studies, University of California. Davis, Research Report UCD-ITS-RR-17-07.
Connelly, C. E., Wilkin, C. L., & Gallagher, D. G. (2011). Understanding underemployment among contingent workers. In Underemployment (pp. 145-162). Springer, New York, NY.
Cotter v. Lyft, No. 13-cv-04065-VC, U. S. Dist. LEXIS 38256 (N.D. Cal. Mar. 16, 2017).
Dynamex Operations West, Inc. v. Superior Court of Los Angeles County, No. S222732 (Cal. Apr. 30, 2018).
Fedex Ground Package System, Inc. v. National Labor Relations Board, 563 F 3d 492 (DC Cir. 2009).
Feeney, M. (2015). Is ridesharing safe? CATO Institute, Policy Analysis.
Feldman, D. C. (1996). The nature, antecedents and consequences of underemployment. Journal of Management, 22(3), 385–407.
Feldman, D. C., & Turnley, W. H. (1995). Underemployment among recent business college graduates. Journal of Organizational Behavior, 16(S1), 691–706.
Feldman, D. C., Leana, C. R., & Bolino, M. C. (2002). Underemployment and relative deprivation among re-employed executives. Journal of Occupational and Organizational Psychology, 75(4), 453–471.
Fichtner, J. J., & Seligman, J. S. (2016). Beyond all or nothing: Reforming social security disability insurance to encourage work and wealth. SSDI Solutions: Ideas to Strengthen the Social Security Disability Insurance Program, 13.
Friedman, G. (2014). Workers without employers: Shadow corporations and the rise of the gig economy. Review of Keynesian Economics, 2(2), 171–188.
Gault, B., Hartmann, H., Hegewisch, A., Milli, J., & Reichlin, L. (2014). Paid parental leave in the United States: What the data tell us about access, usage, and economic and health benefits. Report, Institute for Women’s Policy Research.
Gehrke, S.R., Felix, A., Reardon, T. (2018). Fare choices: a survey of ride-hailing passengers in metro Boston. Metropolitan Area Planning Council. Report #1. February 2018.
Gomez-Mejia, L. R., Balkin, D. B. & Cardy, R. L. (2016). Managing Human Resources. Pearson, 8th Ed.
Hall, J. V., & Krueger, A. B. (2018). An analysis of the labor market for Uber’s driver-partners in the United States. ILR Review, 71(3), 705–732.
Jerrell, T. D. (1997). A history of legally required employee benefits: 1900-1950. Journal of Management History, 3(2), 193–203.
Kaardal, R. J., & Bjornson, A. C. (2018). The gig economy: Dependent contractors, workers’ rights, and the Canadian approach. Proceedings of the American Bar Association Employment Rights and Responsibilities Committee Midwinter Meeting (March 20–24, Clearwater, Florida).
Keeton, R. B. (2016). An Uber dilemma: The conflict between the Seattle rideshare ordinance, the NLRA, and for-hire driver worker classification. Gonz. L. Rev. 52, 207.
Kennedy, E. J. (2016-2017). Employed by an algorithm: Labor rights in the on-demand economy. Seattle UL Rev. 40, 987.
Ko, J., & Hur, S. (2014). The impacts of employee benefits, procedural justice, and managerial trustworthiness on work attitudes: Integrated understanding based on social exchange theory. Public Administration Review, 74(2), 176–187.
Lawson v. Grubhub, No. 15-cv-05128-JSC (N.D. Cal. June 6, 2018).
Leana, C. R., & Feldman, D. C. (1995). Finding new jobs after a plant closing: Antecedents and outcomes of the occurrence and quality of reemployment. Human Relations, 48(12), 1381–1401.
Luthi. (2018). http://www.modernhealthcare.com/article/20180511/NEWS/180519975
Maynard, D. C., Joseph, T. A., & Maynard, A. M. (2006). Underemployment, job attitudes, and turnover intentions. Journal of Organizational Behavior, 27(4), 509–536.
Meyer, D. (2018). Researcher admits study that claimed Uber drivers earn $3.37 an hour was not correct. Fortune, http://fortune.com/2018/03/06/uber-lyft-mit-zoepf /
Milner, A., Witt, K., Maheen, H., & LaMontagne, A. D. (2017). Access to means of suicide, occupation and the risk of suicide: a national study over 12 years of data. BMC Psychiatry, 17(1), 125. https://doi.org/10.1186/s12888-017-1288-0.
Murray v. Principal Financial Group, Inc., 613 F.3d 943 (9th Cir. 2010).
N.L.R.B. v. Friendly Cab Co., Inc., 512 F.3d 1090 (9th Cir. 2008).
Nadler, M. L. (2018). Independent employees: A new category of workers for the gig economy. NCJL & Tech. 19, 443.
Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318, 112 S. Ct. 1344, 117 L. Ed. 2d 581 (1992).
O’Connor v. Uber Technologies, Inc., 82 F. Supp. 3d 1133 (N. D. Cal. 2015).
O'Rand, A. M. (1986). The hidden payroll: Employee benefits and the structure of workplace inequality. Sociological Forum, 1(4), 657–683.
Peticca-Harris, A., deGama, N., & Ravishankar, M. N. (2018). Post capitalist precarious work and those in the ‘drivers’ seat: Exploring the motivations and lived experiences of Uber drivers in Canada. Organization, 1350508418757332.
Rathod, J. M., & Skapski, M. (2013). Reimagining the law of self-employment: A comparative perspective. Hofstra Lab. & Emp. LJ, 31, 159.
Rauch, D. E., & Schleicher, D. (2015). Like Uber, but for local government law: The future of local regulation of the sharing economy. Ohio St. LJ, 76, 901.
Razak v. Uber Technologies, Inc., Civil Action No. 16-573 (E. D. Pa. Apr. 11, 2018).
Redfearn III, R. L. (2016). Sharing economy misclassification: Employees and independent contractors in transportation network companies. Berkeley Tech. LJ, 13, 1023.
Schaller, B. (2017). Empty seats, full streets. Fixing Manhattan’s traffic problem. Schaller Consulting, 1(3).
Scherer, A. G., & Palazzo, G. (2011). The new political role of business in a globalized world: a review of a new perspective on CSR and its implications for the firm, governance, and democracy. Journal of Management Studies, 48(4), 899–931.
Scholz, T. (2017). Uberworked and underpaid: How workers are disrupting the digital economy. John Wiley & Sons.
Schor, J. B. (2017). Does the sharing economy increase inequality within the eighty percent? Findings from a qualitative study of platform providers. Cambridge Journal of Regions, Economy and Society, 10(2), 263–279.
Scott, I., & Brown, E. (2016-2017). Redefining and regulating the new sharing economy. U. Pa. J. Bus. L., 19, 553.
Spence, L. (2016). Small business social responsibility: Expanding core CSR theory. Business and Society, 55(1), 23–55.
Titmuss, D. J. (1969). The Social Division of Labor. Essays on the Welfare State (Boston: Beacon Press, 1969).
Varisco v. Gateway Science & Engineering, Inc., 166 Cal. App. 4th 1099, 83 Cal. Rptr. 3d 393 (Ct. App. 2008).
Vizcaino v. Microsoft Corp., 97 F. 3d 1187 (9th Cir. 1996).
Wanberg, C. R. (1995). A longitudinal study of the effects of unemployment and quality of reemployment. Journal of Vocational Behavior, 46(1), 40–54.
Zoepf, S. M., Chen, S., Adu, P., & Pozo, G. (2018). The economics of ride-hailing: driver revenue, expenses, and taxes.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Ethical Approval
This article does not involve any studies with human participants or animals performed by any of the authors.
Conflict of Interest
All authors declare that they have no conflicts of interest.
Rights and permissions
About this article
Cite this article
Malos, S., Lester, G.V. & Virick, M. Uber Drivers and Employment Status in the Gig Economy: Should Corporate Social Responsibility Tip the Scales?. Employ Respons Rights J 30, 239–251 (2018). https://doi.org/10.1007/s10672-018-9325-9
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10672-018-9325-9