New Jersey to Uber: $649 Million, Please

Uber considers its drivers to be independent contractors. That means they aren’t responsible for things like taxes and unemployment fees for their drivers. California disagreed so strongly that after the National Labor Relations Board ruled that drivers were contractors, they passed a law specifically targeting Uber and similar companies. The goal is to force numerous companies to hire their gig workers as employees. 

While the world focused on California’s treatment of Uber drivers as employees, New Jersey quietly audited and decided that yes, Uber drivers (despite the NLRB ruling) were employees. Uber owed back taxes and fines, totaling $649 million

Uber spokeswoman, Alix Anfang told The New York Times, “We are challenging this preliminary but incorrect determination because drivers are independent contractors in New Jersey and elsewhere.”

New Jersey, of course, disagrees, and this will land in court. 

To keep reading, click here: New Jersey to Uber: $649 Million, Please

Related Posts

6 thoughts on “New Jersey to Uber: $649 Million, Please

  1. This article does not make sense. If “New Jersey quietly audited and decided that yes, Uber drivers were contractors,” why would Uber owe back taxes and fines? And why would Uber be “challenging this preliminary but incorrect determination because drivers are independent contractors in New Jersey”?

  2. Methinks Uber will have trouble with this test:

    “Be responsible for their own profit/loss”

    If Uber drivers could set their own rates, they’d probably lose. But because they can’t set the rates, I think there is a strong argument for failing this test.

    1. If the drivers could set their own rates, I would hope they would set them high enough to cover the costs of operating their cars, paying their taxes, and pay them for their time. The money from Uber and Lyft now barely covers operating the cars.

      The whole thing is a racket taking advantage of people who are really really bad at math.

  3. My head is spinning from the use of wording here, but I am going to try to put it in wording better understood by us non-HR people.
    As I understand it for the big ride-share companies (Uber and Lyft), they don’t “hire” employees, they allow people to use their system (which gets the ride requests) and lets people perform the ride service pickup and delivery, provided the person has enrolled to the app via all the signup obligations. Payment for services rendered is already pre-determined by the services rendered. There’s no time allotment requirement just a ride service pickup and delivery. Unfortunately, there’s no control by these big rideshare companies of the number of people signed into the system at any given time which has resulted in a lot of unhappy drivers who expected to earn a certain amount of income in a limited time period but didn’t because of the over-saturation of ready drivers in the same time zone.
    I used to use a cab service every weekend to get to work and made arrangements for pickup verbal by phone every Friday for the Saturday and Sunday pickups very similar to what is done on those Uber/Lyft apps. I had a pre-acknowledgment of my fare cost and the tip was my decision. (I informed the person at the desk where I called that I would tip a bit better to ensure my drivers would pick me up on time). These “old-style” cab services worked similarly to Uber/Lyft in how they employed and paid their drivers, which is based on the type of fare rides. Long-distance rides (like an airport run) had included
    cost for tolls, etc. Tipping for any fares was suggested but the tip cost was decided by the rider. Through conversations with my various drivers (I usually got one of three), I found out that in order to earn a fair amount of income, they had to work a long shift of at least 12 hours and certain hours of the day were either overstaffed or understaffed because of the number of drivers on duty, resulting in either the driver sitting off duty in a designated rest stop or working way past their desired time to stop. But these cab service companies did follow the rules in place for the paychecks of these drivers which was not based on hours worked but the fares provided. All cars were the company cars, which the maintenance was done by the company, but were gassed up during use by the drivers who got reimbursed when they gave in the receipts in their paychecks. During their use of the cars, all drivers were expected to keep the interior clean and fresh smelling and would let the office know if a rider left a mess without telling the driver. But every driver knew if they worked they would get paid based on services provided. The long-distance rides were pre-arranged and the driver had the choice to not do it if they preferred not too at that time period. There was no guaranteed hourly rate for just being on-duty, which is something that Uber/Lyft created by not detailing the terms of what it means to be a driver on their program.
    This type of job is definitely a contractual job on both sides. Uber/Lyft provides the means to offer ride services if the driver is signed into the app but because of the lack of control of the number of drivers allowed on the app on a given time period, you have oversaturation and undersaturation. Perhaps Uber/Lyft grew too fast at first, to put a detailed explanation into their programs, but now they need an HR approach to settle this into clear defined terms. Neither side is right until then.

  4. Given the amount of press this fight has received, little airtime seems to be given to the fact that drivers:

    – Often work for both Uber and Lyft
    – Have a hand in choosing who they pick up
    – Set their own hours without any input from Corporate
    – Provide & are responsible for their own vehicles/equipment

    I wonder how well received an email to NJ uber drivers would be: “Congratulations on being declared employees, please find the weekly schedule attached. Please be aware that you are not allowed to log into any other apps while “on the clock” and you must drive any rider assigned to you. Also your vehicle is now subject to inspection by your new manager at any time.”

    Folks are so distracted by the $$ they miss the constraints that will come along as well.

Comments are closed.

Are you looking for a new HR job? Or are you trying to hire a new HR person? Either way, hop on over to Evil HR Jobs, and you'll find what you're looking for.