Federal labor board's top lawyer says Uber drivers are contractors

Federal labor board's top lawyer says Uber drivers are contractors
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The federal labor board's top lawyer said Tuesday that Uber drivers should be classified as contractors, meaning they should not be eligible to the full range of benefits offered to full-time employees. 

The National Labor Relations Board's (NLRB) Office of the General Counsel said in an advice memo released Tuesday that the flexibility and control given to Uber drivers means they work with "entrepreneurial freedom consistent with independent-contractor status." 

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"Drivers’ virtually complete control of their cars, work schedules, and log-in locations, together with their freedom to work for competitors of Uber, provided them with significant entrepreneurial opportunity," reads the memo, which was issued last month.

The memo signals the NLRB will side with so-called gig economy companies, like Uber and Lyft, who insist that their workers should be classified as contractors rather than full-time employees. 

Uber drivers and other gig economy workers have organized and rallied against this classification, saying it precludes them from fair labor practices such as minimum wage protections, the ability to form or join a union, and the full range of benefits given to employees. 

Catherine Ruckelshaus, general counsel for the National Employment Law Project, told The Hill that the decision was "to be expected" from the Trump administration, which has sided largely with businesses across a range of issues.

"Workers are getting the message 'don't go to the U.S. government' if they need any kind of help with their job," Ruckelshaus said. "

The NLRB's memo aligns with the Trump administration's recent Labor Department opinion that declared that app-based companies do not have to provide benefits to its workers, including the federal minimum wage or overtime, because they are independent contractors rather than employees.

"[These decisions] are just wholesale carveouts and gifts to these companies, and they’re not based in what the facts of the workers at all," Ruckelshaus said.

The memo from the NLRB's general counsel office comes less than a week after drivers from ride-hailing giants like Lyft and Uber, as well as smaller companies like Juno, went on a mass strike over what they say are unfair working conditions and a lack of transparency from their employers over how much they're paid. 

Uber went public earlier this week, and it has gotten off to a rocky start, with its stock falling more than 10 percent Monday, its first trading day.  

Uber's initial public offering (IPO) was the most highly anticipated tech IPO of the year, and it has so far fallen short of expectations. 

Labor advocates have argued that the drivers who use Uber as their primary source of income should be classified as employees, pointing out that they are largely subject to the company's commission-based system and are central to Uber's business model.

Uber has said treating its drivers as employees could fundamentally alter its business model and incur enormous costs. 

Ruckelshaus said Uber drivers are under the company's "complete control," noting that they "pick up Uber's customers," "can get deactivated if the customer or Uber doesn't like them" and receive wages based on the company's pricing.

The NLRB in January ruled that drivers for SuperShuttle, a small Uber-like app for shuttles, should be classified as contractors. The NLRB's general counsel's office contended that ruling set the precedent for Tuesday's advice memo. 

Updated at 12:43 p.m.