A lot of heavy legal news to get to this week. Senior RSG contributor John Ince covers a recent California ruling that may re-classify drivers, plus how Uber (doesn’t) handle sexual assault accusations and what at least one senator may be trying to do about it.
A CALIFORNIA RULING THREATENS THE GIG ECONOMY [Wired]
Sum and Substance: THE CALIFORNIA SUPREME Court dealt a major blow to the gig economy on Monday in a decision that will have far-reaching effects not just for the likes of Uber and GrubHub, but for many different types of employers.
The court ruled that employers must treat workers who do work related to a company’s “usual course of business” as full-fledged employees. For example, if a store hires a plumber to fix a sink, that plumber wouldn’t need to be considered an employee because the store isn’t in the plumbing business. But if a clothing company paid someone to sew clothes at home, then that person should be considered an employee, entitled to minimum wage, breaks, and other benefits of employment.
The case only directly applies to delivery company Dynamex, but it sets a precedent that could affect many types of workers in California, including care givers, dog walkers, hair stylists, and, of course, drivers for Uber and other gig economy companies, says Eve Wagner, a founding partner of Sauer & Wagner LLP with a background in employment law. “The number of employment lawsuits is going to explode,” she says.
The decision won’t affect people outside of California but work for companies based in the state, says Wagner. In other words, Uber drivers in New York will still be considered contractors, unless New York decides to follow California’s example. But it could have a big impact in the nation’s largest state, home to many of gig-economy companies….
Uber and GrubHub declined to comment. Uber rival Lyft said it is reviewing the decision.
My Take: Oh my… the ground is now shaking under Uber, Lyft and countless other gig economy companies. Yes, this is a significant legal development, but before Uber and Lyft start filing bankruptcy papers, let’s put this in perspective.
The ruling only applies to California workers, a sizable number but still small in comparison to the total worldwide Uber workforce of an estimated 2 million drivers. Second, the ruling now only applies to the one company named in this lawsuit. Third, it’s going to take some time for the legal ramifications of this ruling to make their way through the broader court system.
There will be appeals – many, many many appeals – perhaps taking years. It also remains to be seen whether other courts in other jurisdictions will adopt the same standard. So the game is far from over, but this clearly has changed the nature of this game. An unsustainable business model will have to be modified. Price increases, anyone?
CNN investigation: 103 Uber drivers accused of sexual assault or abuse [CNN/Money]
Sum and Substance: After an evening of cocktails in San Diego, a woman got into the back of an Uber for a ride home. She was so intoxicated she had to ask the driver to stop so she could vomit. She says she then passed out in the backseat. When she regained consciousness, the Uber driver was on top of her, raping her, a block from her home, according to the police report and two sources familiar with the investigation. She was able to escape and dial 911.
Police later arrested the Uber driver, John David Sanchez, 54. When they searched his computer, they found videos of Sanchez raping women and abusing young teenagers, dating back at least five years. In November, Sanchez was sentenced to 80 years in prison for the rape of the Uber passenger and 33 other counts against him, including sexual assaults of at least nine other women and children…
A CNN investigation has found that Sanchez is just one of at least 103 Uber drivers in the U.S. who have been accused of sexually assaulting or abusing their passengers in the past four years. The drivers were arrested, are wanted by police, or have been named in civil suits related to the incidents. At least 31 drivers have been convicted for crimes ranging from forcible touching and false imprisonment to rape, and dozens of criminal and civil cases are pending, CNN found.
There is no publicly available data for the number of sexual assaults by Uber drivers or for drivers of other rideshare companies. CNN’s analysis comes from an in-depth review of police reports, federal court records and county court databases for 20 major U.S. cities…
My Take: It was inevitable that a major news outlet would do an investigation into this issue and then break a story. It’s the kind of story that makes me as a driver very queasy and I suspect it makes other drivers feel the same way.
How many drivers have found themselves in uncomfortable situations, in that passengers are too intoxicated to talk to you, let alone know what’s going on in the car? For many reasons, we recommend dash cameras: to protect yourself and your passenger. As drivers, we have the responsibility (if we choose to accept it – you can always cancel or drive away from someone you find too intoxicated) to get the person home. Having a dash camera, at the very least, can protect you against accusations or provide proof in the case of a crime.
This investigation shows that at least some drivers aren’t guided by a sense of decency or even law and order. It’s an issue Uber and Lyft really need to face. I don’t know the solution, but from this research it appears the problem is now in the open.
I hope DK brings the right kind of perspective and hopefully finds a way to address it in a meaningful and thoughtful way.
Senator to Uber: Stop silencing reported victims of sexual assault [CNET]
Sum and Substance Sen. Richard Blumenthal writes a letter to Uber’s CEO calling on him to “do the right thing” and drop private arbitration agreements….
Pressure is mounting on Uber for it to let passengers who’ve allegedly been sexually assaulted by their drivers sue the company in public court.
Senator Richard Blumenthal, a Democrat from Connecticut, wrote a letter to Uber CEO Dara Khosrowshahi on Wednesday calling on him to release reported sexual assault survivors from their private arbitration agreements and let them sue the company in court. He said such agreements “silence” victims.
… The pressure on Uber to release alleged victims from private arbitration agreements started building last week when a group of 14 women wrote an open letter to Uber’s board of directors. In their letter they said they were all sexually assaulted by Uber drivers in separate incidents. Nine of these women are suing Uber for the assaults and say the company misled them about the safety of its service.
My Take: Forcing arbitration has long been a tactic not only with Uber but also throughout the corporate sphere. What I find so distasteful about Uber’s tactics is that they essentially force this on people by requiring it as part of a long legal document that nobody reads that is a precondition to using the service.
It’s Uber’s way or no way, and this Senator is responding to a determined group of women who think there’s a better way. See this related story from last week, I Wrote the Uber Memo. This Is How to End Sexual Harassment. (NY Times)
Drivers, what do you think of this week’s round up?
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-John @ RSG