California rule that Uber drivers are an employee

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California wants companies behind taxi apps like Uber and Lyft to treat their drivers as employees from now on. The US state senate has passed a law that determines that. The issue of whether companies behind apps that offer odd jobs should treat contractors as staff has been a hot topic worldwide for years.

The new law passed in California stipulates that people can only be treated as an independent contractor if their work falls outside the usual activities of companies. An internet company such as Uber, on the other hand, has many taxi drivers carry out journeys as a freelancer. Many other digital platforms do the same in the so-called ‘gig economy’ such as meal delivery companies or platforms for odd jobs. As an employee, they would be entitled in California to a minimum wage and paid overtime.

Uber is globally in conflict with parties who believe that independent drivers are in fact employees and regularly took the lead. For example, the second highest court in the UK last year ruled that Uber drivers are employees.

In California, an estimated at least one million people are self-employed through digital platforms. In addition to the considerably higher costs, the new law is also of symbolic value. Many developers of apps for the gig economy, who are proud of their innovative character, have their headquarters in the California Silicon Valley.

About the author

Maurice Eisma

Maurice Esma, a co-founder of EconomicInform is a freelance journalist with the expertise in international finance and corporate rights. The author can be reached by email [email protected]

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