Uber drivers may finally be recognized as official Uber employees — and that could be uber-costly.
Officials in New York have ultimately ruled in favor of three former Uber drivers who filed a federal complaint against the transportation giant when their unemployment insurance claims were not accepted. This led to a two-year standoff that has called into question exactly how Uber classifies its extensive army of drivers. This week the New York State Unemployment Insurance Appeal Board decided that drivers can be classified as employees. Alas, the ruling does not apply to the three original plaintiffs, only to other “similarly situated” drivers.
“We won and they lost,” New York Taxi Workers Alliance Executive Director Bhairavi Desai told Politico. The Alliance further believes that this decision marks a broad precedent that could create a new “safety net” for drivers, who have long complained of being unfairly treated by Uber, Lyft, and other ride-hailing companies.
Uber does have the option of contesting the Board’s conclusion, though it will have to do so in New York state court. Uber spokeswoman Alix Anfang did not say whether the company will be pursuing this option, instead saying, “We disagree with this ruling and we are reviewing our options. We are confident that the ruling uniquely applies to the three claimants because many of the practices cited in the opinion never applied to one or more of the claimants, are no longer in place, or never existed at all.”
If Uber elects not to appeal the decision, Labor Department spokeswoman Jill Aurora explained that the company will be “required to make [unemployment insurance] contributions for these, and other similarly situated drivers. If Uber fails to make such contributions, the Department’s procedure would be to conduct an investigation to determine the amounts of contributions that are due as a result of this decision.”
This could put a serious dent in Uber’s wallet, as the company has more than 65,000 drivers in New York City alone, and it shows no signs of shrinking. In fact, a recent report suggests that “Uber alone would be the largest for-profit private employer in New York City — if Uber drivers were classified as employees rather than independent contractors.”
Guess who just hired 65,000 new employees?
