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Uber to Get Boost with Independent Contractor Ruling

Uber to Get Boost with Independent Contractor Ruling

Good news for the ride-sharing community. On Tuesday Uber got a gigantic boost after its IPO valuation launched below expectations. In what is being called an “advice memorandum” from the Office of the General Counsel of the National Labor Relations Board (NLRB) addressed to one of its regional directors, the agency decided that Uber’s control over UberX and Uber Black drivers “by minimally impacting economic and entrepreneurial opportunity” suggests the proper designation for drivers is independent contractor.

The NLRB arrived at this decision by studying its determination on “SuperShuttle.” Here they ruled that drivers are also not employees under the National Labor Relations Act.

The agency stated, “Indeed, UberX drivers had more entrepreneurial opportunity than the drivers in {the SuperShuttle case}, who could control their earnings by selecting specific trips based on profitability, because UberX drivers could base decisions about where and when to log in on time-limited earnings opportunities like ‘surge’ fares and their total freedom to work for competitors.”

Ultimately, this ruling was based on the study of cases between 2015 and 2016 from drivers in three markets: St. Louis, Missouri; Chicago, Illinois; and Brooklyn, New York.

Positive Developments for Gig Economy

Interestingly enough, this suggestion is the second such one to happen lately regarding the gig-economy. Another one occurred on April 29 by the US Department of Labor.

Achieving a worker classification designation is crucial to Uber. In fact, the company made a point to note the cost of lawsuits as a reason for its lower than expected IPO valuation. If this current ruling would have favored a worker designation, this would have proved costly to the company. Consequently, for the ride-sharing world this was positive news.

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