Uber drivers are independent contractors, not employees, says National Labor Relations Board

By Megan Cerullo

/ MoneyWatch

Uber drivers demand better benefits

The National Labor Relations Board on Tuesday made public its opinion that Uber drivers should be classified as independent contractors versus full-time employees who are eligible for benefits and other protections. Labor activists called it a "bogus" decision that does not reflect the true nature of drivers' obligations to the ride-hail giant, which went public last week.

Uber, which lost $3 billion in 2018 alone, operates on a business model that hinges on drivers being classified as independent contractors, absolving the company of the employer healthcare, pension and other benefits costs that would be associated with employing millions of drivers.

The NLRB's memo, written last month and released Tuesday, said that Uber drivers are afforded "significant entrepreneurial opportunity by virtue of their near complete control of their cars and work schedules, together with freedom to choose log-in locations and to work for competitors of Uber."

Trending News

The letter stated that "these and other facts strongly support independent-contractor status and outweigh all countervailing facts supporting employee status."

It also cited drivers' ability to toggle between Uber and competitor Lyft to fulfill ride requests, and their freedom to pursue entirely unrelated ventures instead, as features that afford drivers "entrepreneurial independence."

Uber and Lyft drivers strike over low wages, benefits ahead of Uber IPO

Drivers for Uber and other ride-hail services have organized under the New York Taxi Workers Alliance and other labor groups to protest what they consider to be an unfair classification that strips them of benefits and protections afforded to employees.

Inder Parmar, 54, a former black-car driver turned Uber contractor, said he is so beholden to his job as an app driver that he always has his eyes on his cell phone screen — including when he uses the bathroom.

"We have to hold the phone in front of us to see when a job is coming," he said. "We do not have any authority to refuse the job. If we refuse too many jobs, we can be fired. They call it 'de-activation,' we call it getting fired."

Parmar, who has worked as an Uber driver since 2013, said he feels like he is "on-call" from the moment he steps into his vehicle in the morning. He says he'd seek a different kind of employment — if only he hadn't sunk $70,000 on his vehicle and related expenses so he could working as a ride-hail driver.

"I invested $70,000 in this business and if Uber tells me to get out, I have a liability of that much, and Uber has a liability of zero dollars," he said. "That's why I am stuck, and the same is true for all of Uber's 3 million drivers. Same goes for drivers who lease their cars — they have to make enough money to pay for the lease."

NYTWA founder and executive director Bhairavi Desai called the NLRB's opinion "completely bogus."

"Uber and Lyft directly dispatch trips, control the rate of the fare, and fire you at will. These are all classic employer control. Drivers have barely any control and have barely any protection and that's why millions of them have been left with poverty wages," she said.

Laura Padin, senior staff attorney with the National Employment Law Project, said the business-friendly NLRB neglected the fact that Uber exercises undue influence over drivers by using tactics like surge pricing.

"Uber drivers are not running their own business, which is what it means to be an independent contractor. Uber drivers do not set their own rates; they do not choose their customers. They are not making investments in a business; they are performing the core work of Uber," Padin said in a statement to CBS MoneyWatch.

Uber off to rocky start; China tariffs impact stocks

Uber went public last week in what was widely considered to be a disappointing initial public offering, reflecting investors' concern over if and when the company will ever become profitable. The stock closed 7.6% below its $45 IPO price on the first day of trading, and dropped another 11% Monday, closing $37.10. Uber CEO Dara Khosrowshahi even acknowledged the stock's dismal performance in a note to staff Monday.

"Like all periods of transition, there are ups and downs. Obviously our stock did not trade as well as we had hoped post-IPO. Today is another tough day in the market, and I expect the same as it relates to our stock," Khosrowshahi wrote.

The NLRB's opinion won't likely allay investor concerns.

"The sheen has come off its visions of [autonomous vehicles] and some other dreams that I think buoyed the company's historic valuation," said Anan Sanwal, CB Insights CEO and co-founder. "I think people are re-setting their expectations a bit."

Uber on Tuesday said it would continue to work on improving its relationship with drivers. "We are focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value," an Uber spokesperson told CBS MoneyWatch.

First published on May 14, 2019 / 4:23 PM

© 2019 CBS Interactive Inc.. All Rights Reserved.

U.S. says Uber drivers are independent contractors, not employees

The National Labor Relations Board released its opinion on the controversial matter of Uber drivers' classification

updated 5M ago

"My revenge was success": Female fire battalion chiefs inspire others

When Kishia Clemencia and Queen Anunay joined the fire department in Washington, D.C., only 35 out of more than 1,500 firefighters were women

22M ago

Proposed law seeks to increase access to rape kits

Bipartisan bill would establish national standards of care for survivors of sexual assault and expand access to services, including the specialized nurses who administer rape examinations

32M ago

Homeless teen track star wins scholarship

She was left alone to provide for her siblings and nephew – but she still went to school and ran track

43M ago

"The Simpsons" predicted a "Game of Thrones" twist 2 years ago

"The Simpsons" have done it again

updated 48M ago

DeSantis says Russians accessed Florida voting databases in 2016

Former Florida Gov. Rick Scott, now a senator, was not aware of the hacking in his state while he was governor

2H ago

"The Good Place" Jameela Jamil opens up about her abortion

"The Good Place" actress called it "the best decision I have ever made"

2H ago

China and Russia waging a "shadow war" against U.S., author says

"I think Americans are aware of some of the fronts of the war, certainly election interference, which continues, but they're not aware of others"

3H ago

In a crowded field, Democratic candidates look to Iowa's rural voters

"We don't need saviors. We need people that are going to understand and work with us"

3H ago

House Judiciary Committee sets date for McGahn to testify

McGahn, the former White House counsel, has not yet confirmed his attendance before the committee

4H ago

Why Britain's hotels are going to the dogs

Want to take in the scenic English countryside with your four-legged friend by your side – and even share a table for "high tea"? That won't be a problem

9M ago

Saudi Arabia says its oil pipeline was hit by drones

Saudi Energy Minister Khalid al-Falih Al-Falih vowed that production and export of Saudi oil wouldn't be interrupted

38M ago

American pastor banned from Ireland

The pastor called for the killing of President Obama and praised the Pulse Nightclub gunman

3H ago

China and Russia waging a "shadow war" against U.S., author says

"I think Americans are aware of some of the fronts of the war, certainly election interference, which continues, but they're not aware of others"

3H ago

American says record-breaking dive "opening the door for science"

Victor Vescovo dove 35,853 feet beneath the waves in a submarine to the lowest part of the ocean in the Pacific's Mariana Trench

4H ago

"The Simpsons" predicted a "Game of Thrones" twist 2 years ago

"The Simpsons" have done it again

updated 48M ago

New on Netflix, Hulu and Amazon

Shows and movies you'll want to stream in May

Apr 26 36 photos

"The Good Place" Jameela Jamil opens up about her abortion

"The Good Place" actress called it "the best decision I have ever made"

2H ago

Met Gala 2019: Red carpet looks

See what all your favorite celebrities wore to fashion's biggest night

May 6 80 photos

Tim Conway, star of "The Carol Burnett Show," dies at 85

Conway's publicist said the comedian died Tuesday morning after a long illness

1H ago

U.S. says Uber drivers are independent contractors, not employees

The National Labor Relations Board released its opinion on the controversial matter of Uber drivers' classification

updated 5M ago

Disney gets control of Hulu in deal with Comcast

Entertainment giant, which also plans to launch Disney Plus in the fall, pushes deeper into streaming video

5H ago

WhatsApp flaw let hackers install spyware on cellphones

Signs point to Israeli company NSO, which works with governments, often to spy on human rights activists; spyware kicked in when people made or got calls

4H ago

San Francisco considers facial recognition ban

Civil liberty watchdogs argue the technology can be inaccurate

21H ago

Amazon warehouses reportedly trash millions of unsold products

Retailer under fire after exposes of massive waste in the U.K. and France, where new toys and TVs were sent to dumps

updated 29M ago

American says record-breaking dive "opening the door for science"

Victor Vescovo dove 35,853 feet beneath the waves in a submarine to the lowest part of the ocean in the Pacific's Mariana Trench

4H ago

NASA vows to make ambitious plan to return to the moon "a reality"

The newly announced Artemis program, named after the Greek goddess of the moon, intends to land astronauts on the South Pole of the moon by 2024

7H ago

The moon is shrinking — and may be generating "moonquakes"

As the lunar interior ever-so-slowly contracts, "moonquakes" are produced, NASA data suggests.

8H ago

"The planet's on f***ing fire!" Bill Nye's climate rant goes viral

He's not the same kid-friendly "Science Guy" millennials grew up with

6H ago

American breaks record with deepest-ever sub dive, finds plastic

The diver's team found four new species and something else no other expedition has seen — pollution

20H ago

Proposed law seeks to increase access to rape kits

Bipartisan bill would establish national standards of care for survivors of sexual assault and expand access to services, including the specialized nurses who administer rape examinations

32M ago

Dog disease that can infect people confirmed in Iowa

State veterinarian says several cases of canine brucellosis have been confirmed at a commercial breeding facility for small dogs

2H ago

"The Good Place" Jameela Jamil opens up about her abortion

"The Good Place" actress called it "the best decision I have ever made"

2H ago

Alabama poised to vote on nation's most restrictive abortion bill

If Alabama's bill passes, a doctor who performed one would face up to 99 years in prison

5H ago

Tracking down the source of misinformation fueling measles outbreak

For at least the last four years, what's come to be known as the "PEACH pamphlet" has been circulating in the Northeast, targeting orthodox Jewish communities

8H ago

U.S. says Uber drivers are independent contractors, not employees

The National Labor Relations Board released its opinion on the controversial matter of Uber drivers' classification

updated 5M ago

Brace for higher prices for iPhones, shoes and more if tariffs kick in

Thousands of products the U.S. imports from China could soon cost more — here's how much it could run you

1H ago

Think Starbucks is expensive? This coffee is $75 a cup

Unroasted beans from Panama set a world record for its price tag of $803 a pound — and after roasting, it fetches $1,200

2H ago

Nike responds to maternity leave backlash

Nike tells female athletes to dream big – until they want a baby, Olympic runner Alysia Montano alleges

4H ago

Disney gets control of Hulu in deal with Comcast

Entertainment giant, which also plans to launch Disney Plus in the fall, pushes deeper into streaming video

5H ago

Proposed law seeks to increase access to rape kits

Bipartisan bill would establish national standards of care for survivors of sexual assault and expand access to services, including the specialized nurses who administer rape examinations

32M ago

Ex-coach pleads guilty to creating fake profiles in admissions scheme

She is the fourth coach to plead guilty in the biggest college admissions scheme ever prosecuted in the U.S.

1H ago

Traveling carnival worker killed 3 in 18 days, police say

James Michael Wright faces three counts each of of capital murder, use of a firearm during the commission of a felony and concealing a body

1H ago

Pilot accused of 3 murders had criminal record prior to being hired

Christian R. Martin had been found guilty of mishandling classified information and simple assault

2H ago

Carnival worker allegedly killed 3 women

Investigators in southern Virginia say 23-year-old James Michael Wright confessed to killing two Tennessee women and a Georgia teen he met through his work for a traveling carnival. CBS affiliate WJHL spoke with the cousin of victim Athina Hopson.

1H ago 01:27

Space

NASA wants to send first woman to the moon

NASA is gearing up to send American astronauts back to the moon by 2024, and it hopes to include a woman for the first time. The Trump administration has asked Congress to approve an additional $1.6 billion for NASA's budget. CBS News space consultant Bill Harwood joined CBSN to discuss the ambitious plans.

19M ago 04:35

NASA vows to make ambitious plan to return to the moon "a reality"

The newly announced Artemis program, named after the Greek goddess of the moon, intends to land astronauts on the South Pole of the moon by 2024

7H ago

Trump backs early moon landing with funding request

Trump administration asks Congress to kick-start NASA moon mission with $1.6 billion in additional 2020 funding

18H ago

Shrinking moon may be causing "moonquakes"

NASA says the moon is shrinking and it may be creating so-called "moonquakes." Scientists say the moon's interior is cooling and causing it to shrivel up like a raisin. The shrinking has caused ridges on the moon's surface called "thrust faults" — where one section of crust is pushed up over a neighboring part. Scientists now believe those faults are to blame for the tremors.

15H ago 00:44

Virgin Galactic announces new steps toward offering thrill rides to space

New Mexico officials have eagerly anticipated the arrival of space tourism by Virgin Galactic for more than a decade

May 10

Britain's royal great-grandchildren

Prince Harry's new baby Archie is the eighth great-grandchild for Queen Elizabeth and Prince Philip

May 8 9 photos

Met Gala 2019: Red carpet looks

See what all your favorite celebrities wore to fashion's biggest night

May 6 80 photos

Dale Pike murder: Evidence photos in the case against Enrico Forti

In 1998, Dale Pike came to Miami to discuss a business deal with Enrico Forti — the next day he was dead, and Forti was the prime suspect

May 3 17 photos

Worst movie sequels since 2000, ranked

These are the lowest-rated sequels this century, according to Metacritic's rankings

Apr 30 51 photos

Private secrets shared via postcard

Since 2004, hundreds of thousands of anonymous contributors with something to get off their chest have sent postcards to the website PostSecret.com

Apr 28 32 photos

Popular

NASA wants to send first woman to the moon

NASA is gearing up to send American astronauts back to the moon by 2024, and it hopes to include a woman for the first time. The Trump administration has asked Congress to approve an additional $1.6 billion for NASA's budget. CBS News space consultant Bill Harwood joined CBSN to discuss the ambitious plans.

19M ago 04:35

US reportedly reviews anti-Iran military plan

The New York Times reports Acting Secretary of Defense Patrick Shanahan has prepared a plan to send 120,000 troops to the Middle East if Iran were to attack the U.S. This comes as the U.S. investigates Iran for the alleged sabotage of four oil tankers off the coast of the United Arab Emirates. David Martin and Behnam Ben Taleblu joined CBSN to discuss the escalating tensions between the U.S. and Iran.

31M ago 09:48

North Carolina district holds special primary

Republican voters in North Carolina's 9th Congressional District headed to the polls Tuesday to decide who will represent the party in November's general election. In February, the state's election board overturned Mark Harris' win, after finding he had tampered with the voting process. Nick Ochsner, chief investigative reporter for CBS News' Charlotte affiliate WBTV, joined CBSN with the latest.

updated 39M ago 03:20

Hotels cater to pampered pets

In the dog-loving nation of Britain, some hotels are rolling out the red carpet to welcome four-legged guests. CBS News' Ian Lee reports from the English countryside.

updated 52M ago 01:53

High school track star overcomes homelessness

This high school athlete from Arkansas found herself homeless, taking care of her siblings and paying bills all alone. She overcame the odds to earn a college scholarship for track.

updated 9M ago 03:05