On August 1, 2018, NELP filed an amicus brief, co-written with Larry Mishel from the Economic Policy Institute, in the Third Circuit on behalf of UberBlack drivers in Philadelphia in Razak v. Uber Technologies and Gegen, LLC. Community Legal Services of Philadelphia was an amicus party as well.

At the center of the case, Philadelphia-based Uber limo drivers are arguing that Uber exploited them by misclassifying them as independent contractors instead of employees. Judge Baylson of Eastern District of Pennsylvania granted summary judgment to Uber Technologies and denied the Uber limo drivers’ the chance to go forward and make their argument in front of a jury.

NELP’s brief argued that the Pennsylvania labor law and the FLSA are remedial statutes entitled to broad application—and that the district court misapplied the facts in making a determination that the drivers were independent contractors. NELP described recent research on transportation network companies like Uber, showing that the drivers in this case are not truly running their own businesses.

As NELP has highlighted often in its work on this issue, Uber drivers are fully integrated into Uber’s business, which is to provide ride-sharing services to its customers. The drivers are not running their own separate businesses and should therefore be paid the minimum wage and overtime for any hours worked over forty in a week.

If the Third Circuit rules against the UberBlack drivers, it will be one of the first cases addressing the issue of whether UberBlack drivers are employees within the meaning of the Fair Labor Standards Act.

Uber benefits from the labor that the UberBlack drivers perform, but its business model enables it to avoid paying the costs. Public policy research has shown that independent contractor structures where workers are misclassified harm workers, public coffers, and other businesses.

NELP’s brief also described briefly the ways in which UberBlack drivers do not control their own work, while paying most of the costs. Uber retains and exercises control of its drivers through real-time tracking of driver activities and uses its technology systems and customer feedback loops to assess drivers, which can lead to firing.

In addition, the brief highlighted Larry Mishel’s research on Uber driver compensation, showing that driver pay does not increase with time and experience, as one would expect from an independent business.[1] Instead, Uber drivers can only increase their compensation by working longer hours. Uber drivers are not able to pass along increased costs to their customers or set their own rates, as would any small business owner. Additionally, UberBlack drivers do not and are not allowed to have a direct relationship with their customers, or maintain contact with them, because the customers are customers of Uber.


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Endnotes

[1] Lawrence Mishel, Uber and the labor market: Uber drivers’ compensation, wages and the scale of Uber and the gig economy, Economic Policy Institute, May 15, 2018.

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