The Florida Department of Economic Opportunity has announced that Uber drivers are independent contractors, not company employees. Overall, the ruling, announced by the Deparment's executive director, Jesse Panuccio, is a big victory for the ride-sharing company, which would otherwise have to pay unemployment benefits for all its Florida drivers.
"We are pleased with the Florida’s Department of Economic Opportunity’s final order," Uber spokesperson Bill Gibbons says. "This decision recognizes that Uber’s partners are independent contractors who use Uber on their own terms; they control their use of the app, deciding when and for how long they drive and whether they drive at all."
Symbolically, it's a victory for the company, serving as a reminder that it is up and running in Broward County, where it had at one point been shut out. The order also establishes a foothold for Uber to operate in Florida under existing laws. The order, filed in response to a lawsuit, means that Uber drivers cannot get jobless claims since they will be classified as contractors.
As independent contractors, Florida's Uber drivers won't receive social security, Medicare, or workers’ compensation benefits, along with unemployment insurance. But Uber says drivers are in business with them for the freedom of being able to make their own hours and decide where they'll operate.
"Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss,” the Uber spokesperson says.
The order comes after a lawsuit was filed by two former Uber drivers who applied for unemployment insurance earlier this year. Both were determined to be employees of Uber, which meant they were eligible for what is called reemployment assistance. Uber appealed the decision and won. The Department of Economic Opportunity agreed with the decision, saying that Uber acts more as a middleman to drivers using its app to pick up fares.
“Uber is a technology platform that, for a fee, connects transportation providers with customers seeking transportation," Panuccio wrote in his decision. "Drivers have significant control over the details of their work. Drivers use their own vehicles and choose when, if ever, to provide services through Uber’s software. Drivers decide where to work. Drivers decide which customers to serve. Drivers have control over many details of the customer experience. Drivers may provide services through, or work for, competing platforms or other companies when not using the Uber application. On these facts, it appears that Uber operates not as an employer, but as a middleman or broker for transportation services."
In places like California and Oregon, Uber drivers are classified as employees; the logic used in that classification is that Uber cannot exist without its drivers. But Panuccio argues that, at least for Florida, the idea is that Uber is not an outright employer as much as a platform providing the technology for drivers to use when they need it.
"To a significant extent, these rulings appear to rest on the fact that Uber could not be in business without drivers. But the same is true of all middlemen. Uber is no more an employer to drivers than is an art gallery to artists," he writes.
As for Uber's critics, they maintain that insurance remains their biggest complaint with the company being able to operate in places like Broward, especially from local cabdrivers. Passenger safety in regard to Uber drivers' being insured has been their main concern and complaint.
"Employee classification has never been an issue for the Florida Taxicab Association as it pertains to Uber," Roger Chapin, a taxi association board member and executive with Mears Transportation, says regarding the new order. “Our primary question with the shared Uber model is knowing whether or not by piggy-backing on the driver’s personal insurance policy, if those policies provide same type of coverage that is typically required and only provided on a commercial policy.”
For Uber's part, Gibbons cited a survey that showed, among other things, that 50 percent of Uber drivers in the U.S. drive fewer than ten hours per week on average and that 85 percent said a major reason to work with Uber was to have more flexibility.
“The internet and the smartphones that can now access it are transformative tools, and creative entrepreneurs are finding new uses for them every day," said Panuccio. "People are being connected in ways undreamed-of just a decade ago. Just as many more people can now publish their own thoughts to a vast audience, many more people can now offer their services or hawk their wares to a vast consumer base. This is economic progress based on new technology, but the law’s foundational principles are equipped to handle these changes. We need not break new legal ground or upend economic progress by transforming middlemen into employers."