Classification Tests for Uber Drivers as Independent Contractors or Employees

Applying Each Of The Classification Tests To The Facts Above, Are Uber Drivers Properly Classified As Independent Contractors Or Are They Really Employees?

Does Your Answer Change Depending On Which Test You Use?

The classification tests for determining if uber drivers are into four classes. The tests are essential in determining if uber workers are independent workers or employees, which depends on the motivations why the uber drivers are challenging their independent contractor classification. The tests include the ABC test, common law test, IRS test and the economic realities test.  

If applied by the courts, the common law Test means that Uber drivers under the common law test cannot enjoy protections in the workplace that range from anti-discrimination laws, which are essential in protecting employee welfare. They cannot also claim to be employees as they do not enjoy payroll withholdings and worker compensation benefits. They cannot claim to be employees due to them lacking protections under the National labor relations act, resulting in them not having safeguards in matters relating to wages and hour laws such as minimum wages or even business reimbursement expenses (Bales & Woo, 2016). Additionally, the common law test classifies Uber drivers as independent contractors due to them lacking unemployment benefits and also that their work is not done under the direct control of any supervisor on how they perform their work.

The ABC test states that Uber drivers are independent contractors, as they are free of the direction and control of their hiring company regarding the service performance. Employees are usually not independent of their employers' control, which also gives them direction on how to perform their service or work (Myers, 2019). The ABC test also states that uber drivers cannot be considered employees as they are not bound to offer services to other clients that are the hiring company's core work. Additionally, uber drivers are usually engaged in their other businesses while also providing uber services. All these factors have been met, implying that Uber drivers are independent contractors.

The IRS classification classifies uber drivers as independent contractors due to their having less financial control over their business operations. Due to the uber drivers they may incur reimbursed business expenses while in their work, which is different from an employee who has to be fully refunded. The classification is also due to uber drivers lacking a material relationship with Uber corporation. It is also complicated by Uber not providing employee benefits while also letting the uber driver offer their services to the general market, such as using other taxi-hailing apps when the uber app has not offered work (Zwick, 2018). Additionally, the test classifies Uber drivers as independent contractors because they lack evaluation or performance appraisal measures, as the company only cares about the profits.

The economic realities tests classify uber drivers as they are not fully dependent on the business. Most of them treat the business as a side hustle because they utilize other cab or taxi apps to get clients or even park at specifically designated taxi slots. Uber drivers are allowed to perform other business and that they are the ones who determine when they want to work, which is different from employees who have work schedules to commit (Means & Seiner, 2015). The independent classification is also a result of a permanency relationship and the little investment that the uber company has in its drivers. The lack of managerial skills also makes it hard for uber drivers to be classified as employees, which is too complicated by them not having complete control over their workers.

The answer does not change according to the test applied. It is because uber drivers in all classes are not under the direct control and supervision of uber corporation, which is different from employees who are always under strict observation (Means & Seiner, 2015). Additionally, Uber drivers do not enjoy employment benefits and lack safeguards given to other employees under the National labor relations Act.