James F. Mahoney, Attorney
Commentaries
 
     

April 2016

Uber Opts for European Model of Independent Contractors

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The European Union has long had a type of worker with both the characteristics of employees blended with characteristics of what we in the U.S. call independent contractors. In the latest Uber settlement, the company seems to have played that Euro-card and compromised with lead plaintiffs in two class action suits, one in Northern California and the other in Massachusetts.

This outcome may suggest to us in the transport industry a renewed interest in happy mediums, that is, blended workers. The European model I studied and wrote about last summer is a bit more – okay, a lot more – closely defined and evolved than what Uber and the class members’ lead counsel proposes. If you’ll recall, the EU model of ICs in trucking grants some additional rights of employment despite having contracts and the real freedom to drive for other entities. We needn’t get into all that detail right now because we sure don’t want to sound socialistic again, but the time is probably ripe for us to re-write our ICOAs with a view towards mirroring both the EU model and the EU-lite model that Uber has smartly proposed in its settlement.

We should remember the main reason – or one of them anyway – that there’s opposition to independent contractor work: the fear of losing tax revenue. Real or not, the perception is that Owner-Operators in the transport industry are not self-reporting income or paying mandatory taxes. The EU model takes care of that, but we’re not ready for that just yet. Think of all the ALJs, State, and Federal Court judges whose heads would spin trying to grasp our industry’s regulatory quirks combined with the EU model.

That said, however, the time seems right to continue our efforts to adjust laws of contracting (see Arizona’s business’ efforts now circulating the State House) and also to gingerly approach our OO contracts with revisions that reflect these nascent terms from the EU and Uber’s proposed settlement.