Uber regulations clear NC

House committee
Ride-hailing companies would need insurance that covers their drivers and passengers
Uber is already abiding by these safety and insurance requirements
Some taxi drivers say regulations will give Uber an unfair advantage

Uber driver partner Lisa Schuerenberg takes a fare to a destination in Durham in December. A
House committee approved new regulations for the ride-hailing company and its competitors. Chuck
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An N.C. House committee voted Tuesday to push ahead with regulations for
Uber and similar ride-hailing companies that have changed the taxi industry in
recent years.
The bill would require ride-hailing companies to purchase insurance that covers
their drivers and passengers, including coverage for times when a driver doesnt
have a passenger but has made their vehicle available through the app.
Theyd also have to conduct local and national criminal background checks on all
drivers, pay a $5,000 annual fee to the state, and disclose fares to customers
before they request a ride.
The bill was developed with input from Uber, its competitors and insurance
companies. Uber is already abiding by these safety and insurance
requirements, said Arathi Mehrotra, general manager for Uber in North Carolina.
Passing this bill will ensure that North Carolina residents can access safe,
reliable and affordable options.
Some taxi drivers have said the bill doesnt level the playing field with Uber
because taxis must still obtain licenses in each city they operate in. Most cities
require drivers to be photographed and fingerprinted, while Ubers background

checks are online. A few Senate Republicans voted against the bill, citing
concerns about unfair competition for taxis.
No one spoke against the bill at Tuesdays House Transportation Committee
meeting. Im not aware of any opposition to the bill, said the bills sponsor,
Democratic Sen. Floyd McKissick of Durham.
Current law has no such requirements for the services, which launched in North
Carolina about a year ago. The apps connect users looking for a ride with nearby
drivers who are willing to offer one in their private cars often at fares below
what traditional taxis charge.
Without regulations, drivers and their passengers could find themselves
uninsured. Most personal vehicle insurance policies dont apply if an accident
occurs while the car is being used for a commercial activity.
The bill has already passed the Senate and now heads to the House Finance
Committee.
Rep. Bill Brawley, a Mecklenburg County Republican whos pushing the bill in the
House, said not every group got what it wanted in the regulations. Nobodys
ecstatic, but everybody can live with it, he said. It has all the hallmarks of good
compromise legislation.
Read more here: http://www.newsobserver.com/news/politics-government/politics-columns-blogs/underthe-dome/article30709221.html#storylink=cpy
Uber, Lyft could be operating in Nevada within 30 days
11 August 2015
By Richard N. Velotta
Uber and Lyft could begin operating within 30 days following action Monday by the Legislative Commission.
Commissioners unanimously pre-approved a series of regulations for transportation network companies
submitted late last month by the Nevada Transportation Authority.
Representatives of the commission, comprised of senators and Assembly members who approved legislation
legalizing ride-hailing companies, questioned Transportation Authority Chairman Andrew MacKay and Bruce
Breslow, director of the Department of Business and Industry, for more than an hour Monday morning before
the vote. The meeting was held in Carson City but teleconferenced to Las Vegas.
MacKay said despite efforts to get ride-hailing companies on the road as quickly as possible, Uber and Lyft
have yet to apply to operate in the state.
Now that the legislative group has pre-approved the regulations, it's expected that Uber and Lyft would apply
for permits, possibly as early as this week.

Representatives of Lyft did not respond to phone and email inquiries as to their plans by press time, and an
Uber official gave no clear indication when the company would apply.
"We are encouraged by this progress," Uber spokeswoman Eva Behrend said in an email. "We look forward to
applying for a permit in the near future and to bringing Uber back to the Silver State to offer more options for
people to move around their city."
Regulations still have to be adopted by the three-member Transportation Authority, which has scheduled a
public hearing on regulations for Sept. 11. But not having the regulations in place won't prevent Uber and
Lyft from beginning operations, as long as they comply with Assembly Bills 175 and 176, which established
the ground rules for operations.
Legislators pose questions
The commission approved the rules despite a number of questions from legislators.
Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, said there were several matters discussed when the
legislation was debated that aren't referenced in the proposed regulations.
She noted that the rules mention nothing about driver drug-testing, either prior to a driver contracting with a
company or after an accident. She said the rules also are silent on where and how companies can drop off or
pick up passengers at resort properties and whether drivers would be required to have a business license as
independent contractors.
Commissioners determined that while drug testing was discussed in several versions of the legislation that
finally was approved, the final version required no testing.
MacKay said the issue of where to pick up and drop off at resorts is a matter between the companies and the
resorts and he said each municipality and county would have to determine whether a contractor would be
required to have a business license. The rules do state the companies, but not the drivers, must register with
the secretary of state to conduct business in Nevada.
Much of the operational oversight will be the responsibility of the companies. They'll be required to vet
drivers, inspect vehicles and make sure drivers comply with rules restricting them to 12 cumulative hours of
driving per 24-hour period and being on call for 16 hours during a 24-hour period.
The Transportation Authority would be able to conduct random checks to make sure the companies are
keeping drivers in compliance and could suspend or revoke a license for failure to do so.
Licensing costs
Commissioners also discussed the cost of applying for a license, but took no action demanding a change.
Companies would be required to pay $300,000 for an unlimited number of cars, down from the $500,000 the
authority initially considered.
MacKay said the fee would be used to hire additional staff to monitor transportation network companies and
secure additional office space and technology. The state's Interim Finance Committee would have to approve
those positions before any hiring could occur.
MacKay said he doesn't see the fee the highest Uber and Lyft would pay as a price of entry of any place in
the world as a deterrent to the companies operating in the state.
"We're not trying to create a revenue stream here," MacKay said. "We do not intend to create a goliath of an
agency. Las Vegas will be one of their biggest markets, probably in the world. They're going to get a pretty

good deal out of this and so is the state of Nevada."

MacKay acknowledged that if it turns out oversight of the companies costs less than anticipated, the
overpayment could be used as a credit toward license renewals.

Uber is a special interest nightmare

MICHAEL FARREN, THE FISCAL TIMES

Aug. 11, 2015, 10:38 PM

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driver
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in Mexico
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reading
May'Uber
25, 2015.
out' written on the back windshield of

See Also

Uber's Recent Setbacks Could Spell Big Trouble For The Company's
Huge Ambitions

Tesla Versus The Rent Seekers: The Battle That Sums Up 2013

France Is Banning Ride Sharing Service UberPop

Paris was recently beset by a horde of riotous protesters. They besieged
the airports, blockaded the thoroughfares with piles of burning tires and
assaulted people in the streets. Who were these ruffians? Taxi drivers
almost 3,000 of them rose up to protest ride-sharing services.
The taxi riots in Paris this summer highlight the dangers inherent when
governmental power is captured by special interests. Although the
French experience with taxi cartels is an extreme example, it provides a
useful lesson in the consequences of regulatory capture.
Regulatory capture describes the counter-intuitive tendency of
governmental authority to be twisted and turned toward the purpose of
those interests it originally sought to constrain. It occurs because the
regulated industry or group has a strong incentive to be actively involved
in influencing which regulations are implemented (and how they are
implemented) in order to minimize their undesirable impact or
maximize the harm the regulations inflict on their competition.
Ironically, since the regulated companies possesses the best knowledge
about the practices considered for regulation, government officials must
often rely on those within the industry itself for assistance in crafting
new rules. This imbalance of incentives and information leads to a
situation where, according to Nobel laureate George Stigler, as a rule,
regulation is acquired by the industry and is designed and operated
primarily for its benefit.
The Paris taxi market is a perfect example of governmental authority
being captured by the industry it ostensibly regulates. Through a mixture
of presidential decrees and national laws, politicians have tried to protect
the taxi industry from competition by requiring car service companies
like Uber, Lyft and their French equivalents, to wait 15 minutes before
picking up a passenger. Theyve also outlawed car services use of

GPS geolocation capabilities to link drivers and passengers and even

mandatedoversized engines and minimum car lengths. If French policy
makers hesitate in their protectionist interventions, the taxi unions may
engage in yet another public tantrum to remind them who is Le Boss.

demonstration by French taxi drivers, who are on strike, to block the

traffic on the Paris ring road during a national protest against car-sharing
service Uber, in Paris, France, June 25, 2015.
Unfortunately, the United States is far from immune from this political
favoritism, though thankfully the experience is not quite so extreme. The
R Street Institute, in anassessment of taxi and car service regulations in
50 U.S. cities, found that every city had laws that hindered equal
competition. Shockingly, Washington, D.C., which has a history of taxi
corruption, even considered a law that would have required car services
like Uber to charge a minimum fare at least five times larger than that
charged by taxis. Citing the D.C. Councils proposal, Mercatus Center
Senior Research Fellow Matt Mitchell described it this way: In a
spectacular show of candor, the legislation included language stating that
the rationale is to ensure that Uber does not directly compete with or
undercut taxicab service.
Its not just antagonistic regulation, however, that can result in
regulatory capture. Laws that initially appear relatively benign and
consumer friendly like licensing laws can eventually freeze
innovation and restrict new entrants to the market, leading to monopoly
power for incumbents. My colleague Chris Koopman illustrates this with
regard to Virginias new law regulating transportation network
companies, meaning Uber and the like. The licensing fee for these
companies is $100,000 for the first year and $60,000 each year
thereafter amounts that may be insignificant for established
companies like Uber and Lyft but could easily stymie small start-up
challengers.
Similarly, New York City Mayor de Blasios recent (failed) proposal to
limit the growth of for-hire vehicle companies seemed like a direct attack
aimed at restricting Uber and Lyfts growth to benefit his taxi industry
supporters. However, the long run implications might well have been to
actually limit future transportation service providers ability to grow to a
size where they could compete with the incumbents, thus fortifying the
current companies position in the market.
So whats the answer to regulatory capture? The most straightforward
solution is to have simple laws that apply to every person or company

equally. It is much easier for capture to occur when regulations are so

complex that only those inside the industry can understand the law.
The swelling of regulations over time also contributes to the problem.
Any new laws should include sunset provisions calling for the
reexamination of a regulations applicability in the future. Existing laws
should be held to the same standard. Specific, quantifiable reasoning
should also be required for new regulations to encourage transparency
and avoid inappropriate involvement by special interests.
Travis Kalanick, the CEO of Uber, implicitly recognized the existence of
regulatory capture at LeWeb 2013 when he said, "In the regulatory
world, there is the inside game and the outside game." Policy makers
need to ensure that the rules and regulations they put in place dont
provide firms an incentive to abandon the outside game and start
capturing regulators.

Read more: http://www.businessinsider.com/uber-is-a-special-interest-nightmare-20158#ixzz3ib9sXBHT

UBER- EMPLOYEES

Hong Kong Police Release Uber

Employees on Bail After Raid
Catherine Chen
August 12, 2015 5:24 AM SASTUpdated on August 12, 2015 11:19 AM
SAST
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Hong Kongs police have released three Uber Technologies Inc. employees on
bail after raiding the companys offices and detaining them in a probe into
drivers operating without proper permits.
Documents, computers and phones were taken away from two Uber offices on
Tuesday, the police said in an e-mailed statement. Five drivers were released
on bail after they were detained for allegedly operating without proper licenses
and insurance, the police said.

We will not rule out the possibility of making more arrests, Lo Wai-chung,
police commissioner, told reporters Wednesday. If any traffic accident
happens, the lack of insurance may cause huge losses to passengers, drivers
and pedestrians.
Cab drivers in Hong Kong have protested against Uber and other companies
offering car-booking applications. The police arrested the five Hong Kong
Uber drivers in a sting operation Tuesday morning after receiving complaints,
it said.
We stand by our driver-partners 100 percent and welcome the opportunity to
work closely with the authorities toward updated regulations that put the
safety and interests of riders and drivers first, Harold Li, a spokesman for
Uber in Hong Kong, said in an e-mailed statement. Uber ensures that all
rides are covered by insurance, and all drivers on the platform undergo an
extensive background check.

Uber drivers could earn

thousands in benefits as
full-time employees

by

Claire Zillman

@clairezillman
AUGUST 11, 2015, 2:45 PM EDT
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According to a new analysis, Uber drivers in six major U.S.

cities would receive paid holidays and health care benefits
worth an average of $5,500 annually.
Ever since the California Labor Commission ruled in June that former
Uber driver Barbara Berwick should be considered an employeenot
an independent contractortheres been speculation of what will
happen if the $51 billion unicorn loses its ongoing appeal of the nonbinding decision. (The well-funded ride-sharing platform likely has
enough resources to adapt its relationship with drivers to meet the
demands of an unfavorable ruling.)

A new analysis published Tuesday flips that focus. It seeks to

determine what drivers would receive if the company were to provide
them with the same benefits as its full-time employees. Personal
finance site Nerd Wallet estimates that Uber drivers in six major cities
in the United Statesif deemed full-time employeeswould receive
paid holidays and health care benefits worth an average of $5,500
annually, plus thousands more dollars in mileage reimbursement.
Nerd Wallet analyst Jeffrey Chu arrived at his $5,500-plus conclusion
by first examining how much Uber drivers would receive if they had
access to the nine paid holidays that are given to Ubers current fulltime employees. Using hourly wage data from Uber for each of the six
cities included in the analysisBoston, Chicago, Los Angeles, New
York, San Francisco, and Washington, D.C.,and assuming an eighthour work day, Nerd Wallet calculated that drivers would receive
between $1,167.12 and $2,134.80 in holiday pay.
By considering Bureau of Labor Statistics data on per capita health
expenditures in the six cities, Nerd Wallet estimated that depending
on where an Uber driver lived, he or she would receive health care
benefits valued at between $2,869 and $4,518 as full-time employees.
If drivers win full-time status, mileage reimbursement could be the
source of their biggest gains. In less than two months of driving,
Berwick, the Uber driver in the California case, racked up 6,468 miles
and was owed $0.58 per mile for a total of $3,878, plus $274 in
interest, according to the Commissions ruling. Extrapolated for an
entire year, that mileage and reimbursement rate would award her
$22,315 to cover gas, oil, insurance, repairs, tires, vehicle

maintenance, and depreciation. Uber must pay Berwick for mileage

because California law requires employers to provide employees with
mileage reimbursement. Nerd Wallet assumes that because Uber is
based in California it would also be required to reimburse drivers in
other states at similar rates.
While the California case relates to just a single driver, if its upheld, it
could motivate Uber drivers nationwideand other sharing economy
workers, for that matterto seek employee status. And if they worked
enough hours they could be considered full-time.
The number of hours logged by current Uber drivers would suggest
that very few would earn that full-time status, though. According to a
driver survey published earlier this year, 50% of Uber drivers in the
United States, on average, drive fewer than 10 hours per week. Its also
possible that drivers use of the app could change should courts alter
their classificationmeaning that making projections about what fulltime employee status would mean for drivers as they operate now may
be a stretch. An Uber spokesperson said that if drivers became
employees they would drive set shifts, earn a fixed hourly, wage, and
lose the ability to drive using other ride sharing apps as well as the
personal flexibility they most value.
The post has been updated to reflect comments from Uber.

Despite Ubers Arguments, Flexibility for

Employees Is a Companys Choice

SCOTTCHAN/Shutterstock
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By Carmel DeAmicis

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August 11, 2015, 10:13 AM PDT

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Uber says its drivers would lose flexibility if it were forced to reclassify its
workers as employees rather than contractors a claim it recently made in
conjunction with a contentious lawsuit thats now getting under way.
The way we look at it, the laws governing employers require [them] to exert
much more control over their employees, monitor, make sure theyre taking
break times, Ted Boutrous, Ubers lawyer, said in a press conference last
week. Its inevitable the flexibility and autonomy that drivers crave would
have to be limited. A spokesperson added that managing overtime would be
another reason Uber would have to assign shifts.
Theyre stretching the truth. Labor laws dont prohibit flexible working
conditions. If drivers were legally employees, they could still drive one hour
one week and 40 the next. In a business like Ubers, where apps track when
workers are logged in, it would be easy for a company to send a push
notification to people after four hours of work, requiring them to take a 15
minute break, or for the app to turn off after a 40-hour workweek to prevent
overtime. Monitoring drivers would be easy for a company whose algorithms
have optimized pricing at all hours.
When I raised that point, Boutrous said, One of the reasons we think this
would create issues is matching supply and demand making sure there are

enough drivers when demand is there. That would require more rigid
scheduling and the like.
At the heart of the issue is whether Ubers drivers should be classified as
independent contractors or employees. If they are considered employees,
Uber would have to pay more in taxes, offer benefits like workers
compensation and cover their expenses like gas. That could cut into its $51
billion valuation, as well as set a precedent for other startups designed
around the so-called on-demand economy, where workers arent afforded
benefits typical at most companies.
If Uber or Lyft or other ride-hailing services decided theyd like to allow their
employees to be completely flexible, there is nothing that would prevent
them from doing that, California labor lawyer Jason Erlich told Re/code. Its
disingenuous that they would make an argument that they couldnt figure
that out.
When challenged on the issue at the press conference, Boutrous took a
different tack, arguing that workers couldnt work for multiple companies if
they were employees.
He said that working for Lyft and Uber simultaneously would go away
because under California law duty of loyalty to your employer you cant
shift back and forth.
But once again thats a truth stretcher. Its actually up to the employers
whether or not to activate whats known as the duty of loyalty clause of the
California Labor Code. The law was written to protect employers, not as a
mandate, so Ubers drivers would only have to stop working for Lyft if Uber
demanded it. Or, conversely, theyd have to stop working for Uber if Lyft
reclassified its drivers as employees and demanded their loyalty.
So why does Uber trot out the flexibility argument if theres no law
preventing flexible employment?
For one thing, its aimed at making its workers more amenable to the idea of
being contractors. Thats how Uber was able to get 400 drivers on the record
in a court case saying theyd rather be contractors than employees. The
company hasnt told its drivers about the possibility they could still work
flexible hours and reap the benefits of employee status.
As independent contractors, drivers have the flexibility and control to design
their work as they see fit, an Uber spokesperson said, reiterating its
common refrain. Seventy-three percent of drivers say they would rather
have a job where they choose their own schedule and are their own boss
than a steady nine-to-five job with some benefits and a set salary.

But theres another more nuanced argument for why Uber might be making
the claim. Should Uber lose the lawsuit, the company would face millions in
added costs and would likely want to set more stringent requirements for
drivers such as mandated work hours moves that would be entirely up to
the company.
Suggesting it would be legally bound to cut flexibility is another way of
saying its completely out of the companys hands.
Of course, Uber would take a significant financial hit if it had to reclassify,
and it would be completely within its rights to change the terms of work if it
loses the case.
If you have employees as opposed to independent contractors, you have to
have an HR office and payroll services, someone there to calculate the hours,
ensure theres compliance with wage and hours laws, Don Polden, a labor
law professor at Santa Clara University, told Re/code. Its very difficult to
provide all those services if you have someone working one to two hours a
week it just doesnt scale out.
Health care is another big cost. Once a company has more than 50 full-time
workers, it has to either buy them health insurance or subsidize the
insurance they buy themselves. If an employee works 40 hours one week
and two the next, a company is on the hook to help with health insurance
despite not receiving the benefits of a real full-time employee.
To make up the costs, the company would probably start scheduling workers
on shifts and banning them from working for other companies.
It makes perfect business sense to eliminate flexibility if Uber were required
to incur additional costs in reclassifying its workers. But thats not what it is
arguing in court.

Even if Uber loses class certification motion Today, all is

not lost for ride-sharing tech giant
Independent Contractor Compliance and Misclassification Legal Blog
Pepper Hamilton LLP
Blog

USA August 6 2015

On August 6, 2015, Uber drivers in California sought preliminary approval of
their motion for class certification in their independent contractor
misclassification lawsuit. A hearing was scheduled in the U.S. District Court for
the Northern District of California before Judge Edward M. Chen on the drivers
motion for class certification. The parties argued their positions to the court but
no decision is expected for a few weeks. There is a high likelihood that the court
will permit the drivers to proceed in a class action instead of through individual
claims. The legal burden to secure preliminary approval of class certification is
not particularly high. Even if, as expected, the court grants such approval, Uber
has at least three ways that it can still succeed in the lawsuit and ultimately
maintain its independent contractor classification of drivers providing services to
Ubers customers: decertifying the drivers class action status at the final class
certification proceeding; winning at trial; or restructuring and re-documenting its
independent contractor relationships in a manner that enhances its compliance
with state and federal laws governing independent contractors. The latter
means for Uber to succeed is the subject of this blog post.
What already transpired in this case?
On March 11, 2015, Judge Chen denied Ubers motion for summary judgment
and ruled that a jury would have to decide whether the drivers are either
independent contractors (who are paid on a 1099 basis and have no rights
under state or federal wage or labor laws) or employees (who are paid on a W-2
basis and have rights under those laws protecting employees).
What evidence did the court focus on in deciding that a jury would have to
determine if the drivers are employees and not independent contractors? Uber
showed that drivers have the right to make themselves available for work
whenever they want and that they are not required to accept available
engagements which is commonplace in the gig economy. The drivers showed

that Uber expressly reserved the right to terminate the drivers relationship or
terminate the use the company app if a drivers customer ratings are deemed
unacceptably low or for any reason at all. The court noted that this factor is a
key one favoring employee status.
The court stated that while there are numerous factors that bear on whether a
worker is an employee or contractor, the principal test of an employment
relationship is whether the person to whom service is rendered has the right to
control the manner and means of accomplishing the result desired. To that end,
the court identified other factors favoring employee status, including Ubers
Driver Handbook, which instructs drivers, among other things, to dress
professionally, send the client a text message 1-2 minutes from the pick-up
location, make sure the radio is off or on soft jazz or NPR, to make sure to
open the door for your client, and to have an umbrella in [their] car for clients
to be dry until they get in your car or after they get out.
The judge also found evidence that Uber monitored their drivers performance to
ensure compliance with Ubers many quality control standards by requesting
that passengers give drivers a star rating on a scale from 1 to 5 after each
completed trip based on the drivers performance. He found evidence that Uber
uses these ratings to monitor drivers and to discipline or terminate them.
Ubers contract with drivers provides that it may terminate any driver whose
star rating falls below the applicable minimum star-rating.
Although Uber argued that the Driver Handbook merely contained
suggestions, Judge Chen dismissed that argument by referring to the
mandatory language of the document and evidence that failure to follow the
suggestions could be enforced by disciplinary action or termination.
Takeaways
As we stated in our blog post on March 12, 2015, that decision by the court does
not mean that companies cannot prevail on independent contractor
misclassification claims. In fact, the decision by Judge Chen pointed to two
recent cases where courts in California found workers to be independent
contractors as a matter of law. As the court noted, even though some factors

may have cut in favor of employee status, courts will still find independent
contractor status when all of the factors weighed and considered as a whole
establish that [an individual] was an independent contractor and not an
employee.
Is it too late for companies already operating in a less than ideal level of
compliance to restructure and re-document a companys independent contractor
relationships in order to minimize the risk of misclassification liability? No. As
we noted in our September 18, 2014 blog post entitled Silicon Valley
Misclassification, tech companies that use the 1099 on demand business
model are at risk if they do not take care to structure, document, and
implement their independent contractor relationships in a manner consistent
with federal and state IC laws. Likewise, as I commented on a May 19, 2015
webinar that also featured one of the lead attorneys for Uber, Shannon LissRiordan: [T]he best time to [enhance independent contractor compliance], of
course, is before you get a summons or court complaint from someone such as
[Ms. Liss-Riordan] or before a regulatory challenge is commenced. And even for
those companies that are in the midst of legal challenges, its not too late to
minimize or avoid future independent contractor misclassification exposure.
Weve used a proprietary process called IC Diagnostics that has worked very
well for companies that are trying to fit their business model into existing laws,
both at the federal and state level.
While it is ideal to structure and document independent contractor relationships
properly from the start, many companies, especially tech start-ups in the ondemand sharing economy, have not done so. As noted in the May 10 webinar,
many new and existing companies have resorted to IC Diagnostics to enhance
their level of independent contractor compliance under the applicable tests
for independent contractor status under governing state and federal law. That
proprietary process also offers a number of practical, alternative solutions to
enhance compliance with those laws, including restructuring, re-documenting
and re-implementing the IC relationship; reclassifying 1099ers as W-2
employees; and redistributing 1099ers as more fully described in our White
Paper on the subject.

Companies that wish to retain an independent contractor business model

generally opt for restructuring, re-documenting, and re-implementing their
contractor relationships. While not all companies can eliminate most control and
direction over workers treated as 1099ers, the overwhelming number can
effectively restructure their contractor relationships to comply with federal and
most state laws. The IC Diagnostics process provides the means to stress-test
the relationship. If it can be effectively restructured to comply with contractor
laws, the next step in the process is re-documentation. What seems like a
simple act of dotting your is and crossing your ts, though, is anything but;
indeed, many independent contractor statutes and most judicial and
administrative decisions in this area are often counter-intuitive.
As we observed in our August 29, 2014 blog post entitled Earthquake in the
Independent Contractor Misclassification Field, we concluded that FedEx
Ground lost a key case because of its misplaced reliance on an independent
contractor agreement and its policies and procedures that were good, but not
good enough. Plainly, FedEx is a savvy company, but close scrutiny by a court
found one fallacy after another in the very documents FedEx created sufficient
in degree to lead the court to rule against FedEx. As we noted, IC agreements
and policies and procedures that are not drafted in a state-of-the-art manner,
free from language that can be used against the company, can cause
businesses that use ICs to face class action litigation or regulatory audits or
enforcement proceedings they may be able to otherwise avoid.
Lastly, the implementation of a legitimate independent contractor relationship is
just as essential as the structuring and documentation. As shown by the courts
decision in this case in March, even when contractual provisions were drafted in
a manner intended to be consistent with governing laws, it was argued that
Uber failed to strictly follow the contractual limitations on direction and control
when they put their contractor relationships into effect. There is no reason,
however, why a company committed to complying with independent contractor
laws cannot, when exercising both rigor and restraint, implement and carry out
in practice an enhanced contractor relationship. Uber can take this step even if
it loses at trial or (if it wishes to place itself in a better position sooner), before
the trial and all appeals are completed.

TECH

All Hail Uber

20

AUG 11, 2015 8:00 AM EDT

By The Editors

Uber is a brand, a verb, a proprietary eponym, a loss-making $50

billion enterprise and a new way of doing business -- one that's
upending industries, worrying workers and thrilling consumers around
the world.
Uber is one of many new companies eager to act not as suppliers but
as platforms -- offering smartphone apps that connect drivers with
riders, apartments with travelers, handymen with homeowners. Such
arrangements are often known as the "sharing economy." They're
starting to take off, and they pose something of a challenge to policy
makers and regulators.

The Sharing Economy

For the platform owners, the logic is powerful: Use next to no physical
capital, employ almost no workers, assume few risks and take your cut
of each transaction. For customers, it's just as sweet: Get more of what
you want more easily, and pay less for it. For worker-suppliers, it's a
mixed bag: Profit from greater demand for what you have to sell and
from easier access to buyers -- but sometimes for less pay, and without
the employee benefits and security that go with traditional jobs.
For officialdom, that's a vexing combination. What's the right response
to a company that causes much unease and disrupts entrenched
interests, yet also has immense potential benefits for consumers?
In Uber's case, two possibilities suggest themselves.
One appealing option is to have no response at all. Have you tried
Uber? It's great. Its innovations -- such as surge pricing, which ensures
more drivers are available when demand is highest -- are exciting. For
many drivers, it's a boon. Uber's battles with local governments have
become the stuff of legend, but more and more places are welcoming
it -- some 300 cities so far -- and they often find themselves wondering
what the fuss was all about.

Another response is to remember that old laws are sometimes ill-suited

to new technology. A pending California lawsuit -- on behalf of Uber
drivers who say the company owes them for expenses and tips -- offers
a case in point. Uber says its drivers are independent contractors,
which means they aren't covered by most labor regulations and aren't
owed expense reimbursements, overtime pay and so on. Some drivers
(along with the California Labor Commission) assert that they're
actually employees, and as such entitled to those benefits and more.
They're probably both wrong. The New-Deal-era classifications that
prevail in the U.S. -- either contractor or employee -- make little sense
for Uber and its peers, which let their workers set their own hours and
operate with a lot of independence (as contractors would) but also
monitor their performance and set their pay rate (as with employees).
A California judge considering a similar case said that state law
"provides nothing remotely close to a clear answer" to the conundrum
and that the jury would be "handed a square peg and asked to choose
between two round holes."
Expect such confusion to persist until lawmakers, state and federal,
start thinking more creatively. That might mean considering new kinds
of classifications -- for instance, the "dependent contractor" model
used in Canada and elsewhere. It might require rethinkingparts of the
social safety net that were designed with full-time employment in
mind. It will surely mean, in the federalist spirit, that states should
experiment with a variety of new arrangements and find what works
best for their citizens.
If self-driving cars catch on, labor laws of all kinds may one day be
amoot point for Uber. But industry after industry is testing the logic of
its approach -- hence Uber for tailors, Uber for doctors, Uber forgetting
wasted. Each will present its own complications. On the whole, though,
this phenomenon should be viewed with optimism -- and a willingness
to question whether the old ways of doing things still make much
sense in the age of on-demand cannabis.

Uber can satisfy all of its

employees concerns
San Francisco Chronicle

August 9, 2015

Photo: Jeff Chiu, Associated Press

Uber driver Karim Amrani sits in his car parked near the San Francisco International Airport parking
area in San Francisco, Wednesday, July 15, 2015. In the three months ended in June, Uber overtook
taxis as the most expensed form of ground transportation, according to expense management
system provider Certify. (AP Photo/Jeff Chiu)

A driver lawsuit against Uber, now unfolding in a San Francisco courthouse, could
have enormous implications for both the on-demand ride company and a slew of
startups with similar business models.

There are two big issues at stake in the Uber lawsuit. The matter thats likely to have
the biggest impact on Uber itself is whether the current lawsuit, which was filed by
three drivers two years ago, will turn into a class-action suit.
A full class-action case would swell the number of plaintiffs from three to 160,000
the total number of current and past Uber drivers in California. Such a change would
have enormous repercussions for Uber, and the company is fighting hard to prevent it
from happening.
But the issue that has a greater potential impact for the new technology-driven,
service-focused economy is the original question posed by the three drivers.
Is it fair for these new companies, which exert a large degree of control over their
workers lives, to classify them as independent contractors?
Its a complicated question that goes to the heart of the instability that so many
American workers are facing.
The Uber drivers make a good point when they argue that the company exerts much of
the same control over their lives that a traditional company holds over its employees.
Uber controls the amount of money drivers are allowed to charge for a fare, and it
monitors drivers behavior and performance through its rating system.
Thats a substantial amount of control. Its worth noting, too, that more and more
service-oriented startups are reclassifying their workforce as employees both to avoid
lawsuits like the one Uber is currently engaged in, and as an admission that their
companies work better when they have control over their workforce. On Thursday,
Sprig, a meal-delivery service, announced that it would reclassify its contract drivers
as employees, and Instacart, a grocery-delivery company, announced that it would
offer reclassification opportunities to a large portion of its contract workers in San
Francisco, San Jose and Los Angeles.

On the other hand, Uber doesnt control its drivers schedules a major step in the
employee relationship and many of its workers see that flexibility as the biggest
benefit of working for the company.
What this suggests is that what employees really need is more flexibility, and what
contractors really need is more economic stability and job security. Getting that
balance right is a project for the entire country, and its going to be a major challenge
in the years to come.
In the meantime, Uber cant continue having it both ways forever. As Instacart has just
demonstrated, the company can offer employee opportunities for its most dedicated
drivers, and contractor status for those who value flexibility over security. Uber
should try this third way.

hould you use Uber for business?

MAI NGUYEN
Special to The Globe and Mail
Published Wednesday, Aug. 12, 2015 5:00AM EDT
Last updated Tuesday, Aug. 11, 2015 4:42PM EDT

0 comments

It seems a day doesnt go by without another legal battle for Uber, the ride-sharing service thats
currently embroiled in too many fights to count. Toronto cab drivers recently announced theyre suing
the San Francisco-based company for $410-million in damages, while the cities of Vancouver and
Calgary have shut it down altogether. That leaves many small- and medium-sized employers
wondering if they should steer clear of the ruckus.

VIDEO

Video: California rules Uber drivers are employees, not contractors

TRANSPORT

Video: Taxi drivers protest against Uber in Mexico City

The app/taxi service launched in Toronto in 2012, and currently has a presence in 58 countries around
the world. The allegations plaguing Uber mostly surround the UberX service, which allows everyday
drivers to transport passengers for a discounted fare using their own cars.
Last September, Uber presented a compelling alternative to cab chits and expense cards with the
launch of Uber for Business (U4B). The service claims it can save businesses up to $1,500 per
travelling employee a year, particularly through the low-cost UberX fleet. It also saves time,
approximately 13 minutes a month thanks to an easier expensing process.
Employees can bill rides directly to their companys business through the app. At the other end,
administrators can track all trips on a centralized dashboard in real time, instantly receiving details
such as the total cost, the route and the purpose of the ride. With billing and tracking all in one place,
that means goodbye to crinkled receipts and onerous stages of approval.
According to Ubers senior communications associate, Susie Heath, U4B has had great interest among
local businesses in Toronto. Theyve seen increased productivity by freeing up their employees time
with seamless expense reporting, Ms. Heath said in an e-mail.
The company doesnt have exact numbers on how many companies have adopted U4B since it opened
for business, though Ms. Heath says 30 per cent of Uber rides in Toronto start or end at an
independent business.
Trends in the United States are signifying a trend toward more Uber requests for work-related rides.
Certify, a cloud-based travel- and-expense-management software company, found that, for the first
time, business travellers hailed more Ubers than taxis in the second quarter of 2015. According to the
report, 55 per cent of ground transportation rides on the company dime were through Uber. Thats up
from 26 per cent in the same reporting period of 2014.
The fact that Uber is gaining ground among business travellers has much to do with convenience and
cost savings. Rethink Canada is a creative agency with about 130 employees in Toronto, Montreal and
Vancouver. Theyre the ones behind the viral Molson Canadian Beer Fridge campaign. It also previously
worked with Uber on a creative campaign to spread awareness on drunk driving.

The company signed up for U4B in May as a solution to the time suck of expensing. Its a huge pain
to track expenses and claim expenses afterwards, says accounts director Scott Lyons, who estimates
it takes him roughly 30 minutes a month to collect all his cab receipts. It eats up a lot of our time and
given were in a service industry, that time is much better spent doing work for our clients.
Rethink is currently testing out U4B as a pilot program among its 10-person accounts team before
rolling it out to the rest of the 40 employees in its Toronto office later this year. In the month of July,
the team spent roughly $1,000 on UberX rides, which has saved them $700 compared to traditional
taxis.
Its always great to save money, plus its really about the convenience, says Mr. Lyons.
Though Uber is making deep inroads in the taxi industry, the Global Business Travel Association found
that one in four travel buyers say their companies dont allow their business travellers to use ridesharing companies, partly due to the lack of understanding about where their liabilities begin and end.
Theres good reason to be wary. In July, the City of Toronto cracked down on 36 UberX drivers and
charged them with operating vehicles unlicensed to pick up passengers. Meanwhile, Uber consistently
faces criticism for not properly screening its drivers, including checking criminal records.
Its not entirely clear what liabilities exist for small businesses. According to Daniel Chodos, a Toronto
employment lawyer with Whitten & Lublin, Ontario businesses covered by the Workplace Safety and
Insurance Board of Ontario (WSIB) generally cannot be sued by an employee who is injured or
involved in an accident during a work-related Uber trip in the course of their employment.
Whether employees are riding in a licensed taxi or an Uber, the employee is still travelling on behalf
of the employer and any issues would be dealt with through the WSIB system if theyre covered, says
Mr. Chodos.
Employers without coverage from the WSIB, which provides workplace insurance and protects
businesses from costly court settlements, can possibly be sued for negligence or for breaching the
standard of care by requiring their employees to travel with unlicensed drivers.
Another thing businesses should consider is Ontarios Highway Traffic Act, which states no person can
arrange rides in unlicensed taxis for compensation. Uber is currently facing allegations that it has
violated parts of this act.
Patrizia Piccolo, a partner at employment-law firm Rubin Thomlinson LLP, says it is feasible employers
themselves could also be in violation.
If an employer is an owner of an Uber business account and theyre arranging for their employees to
access these unlicensed vehicles, they could be going against provisions of the Highway Traffic Act,
says Ms. Piccolo. Those guilty of an offence can face fines of up to $20,000.
For employers brave enough to wade through the legal issues and sign up for U4B anyway, Mr. Chodos
recommends giving employees the option to travel in a licensed taxi. He also advises employees be
trained on how to use the app properly and distinguish between professional and personal trips.
Legal decisions involving new technologies tend to have a lag in terms of recognition within the legal
world, says Mr. Chodos. It can take years before a trial is heard. For now, you just have to think
creatively about the possible consequences knowing ultimately anything can happen.

Follow @GlobeSmallBiz on Twitt

lewis stores

Lewis challenges NCR insurance finding

August 7 2015 at 06:50pm
By Siobhan Cassidy Comment on this story

INDEPENDENT MEDIALewis Group Ltd. issued a statement

objecting to the handling of a complaint about the selling of insurance policies providing loss of employment and
disability cover to pensioners and self-employed consumers.

Cape Town - Lewis Group came out fighting on Friday, issuing a statement
objecting to the handling of a complaint about the selling of insurance policies
providing loss of employment and disability cover to pensioners and selfemployed consumers.
The National Credit Regulator alleged last month that the groups subsidiaries Lewis Stores
and Monarch Insurance had contravened the National Credit Act by selling the policies to
certain customers. Since these consumers were not entitled to benefits provided under the
policies, the regulator argued, Lewis and Monarch had sold such cover with the intent to
defraud the consumers and referred the complaint to the National Consumer Tribunal.
Fridays statement said that Lewis and Monarch were opposing the referral and had filed a
comprehensive answering affidavit. The affidavit raised numerous challenges to the
regulators findings, including failure to properly consider the complaint, failure to conduct a
proper investigation or to properly engage with Lewis and Monarch. It also raises questions
about jurisdiction over Monarch.
The company said Lewis and Monarch had demonstrated in the affidavit that the regulators
allegation that the sale of certain policies to particular customers was fraudulent and
deceitful and was done with the intention to defraud consumers was patently untrue and had
no factual basis.
The group said that an internal investigation by Lewis going back to June 2007 had found
that a small percentage of pensioners and self-employed people were sold the policies in
question through human error and in contravention to Lewis policies. The retailer was
reported to still be calculating the amount to be refunded to consumers. An estimate from
Lewis suggests that about R46 million in premiums plus interest of R23 million would be
refunded to consumers.

The group added that Lewis and Monarch reject the NCRs allegation that the sale of
disability insurance to pensioners and self-employed people constitutes a contravention of
the NCA. Their affidavit is said to include data showing that claims against these policies by
pensioners and self-employed people had been, and continued to be, honoured by Monarch.
ANA

Lewiss shares leap with affidavit

August 11 2015 at 07:45am
By Dineo Faku Comment on this story

INDEPENDENT MEDIAA Lewis store in Primrose,

Johannesburg.

Johannesburg - Lewis Group, South Africas troubled furniture company, says it

will refund consumers a total of R69 million in both premiums and interest.
This follows an internal probe that found human error was one of the reasons behind the awarding
of loss of employment policies to pensioners and the self-employed.
Relief rally
By Fridays end, Lewis shares had climbed the highest of the JSEs all share stocks. Lewis ended
Friday up 10.32 percent at R66.18.
The movement was sparked by the news that Lewis, and Monarch Insurance, had filed an
answering affidavit to a complaint by the National Consumer Tribunal that they had contravened the
law by selling policies for loss of employment to pensioners and the self-employed, people who are
not entitled to such policies.
Mark Hodgson, an analyst at Avior Capital Markets, said the rise of the share indicated relief among
investors.
There appears to be a relief rally in the Lewis share price following a forceful response by the
company to the regulator and other criticism of its business practices with very few concessions
made, he said.
Another analyst, who spoke on condition of anonymity, said: Lewis seems to have come up with
some very plausible arguments in response to the accusations.
Lewis said on Friday both companies had rejected claims by the National Credit Regulator (NCR) to
the tribunal that the sale of the policies was fraudulent and deceitful.

Lewis said its internal investigation had found that a small percentage of pensioners and selfemployed people were sold such policies, through human error and contrary to Lewis own internal
policies.
The retailer is still calculating the amount to be refunded to consumers.
Although the calculation exercise has not been completed, shareholders are advised that Lewis
estimates an approximate amount of R46m in premiums, and interest of R23m, will be refunded to
consumers, Lewis said.
The company also rejected the NCRs allegations that the sale of disability insurance to pensioners
and people who were self-employed constituted a contravention of the NCA.
And Lewis directors said they had taken exception to media reports and statements by
commentators on the groups credit business. They said its credit model was well-suited to its
lower-to-middle-income target market where customers relied on store credit to buy products.
The directors believe the groups business model has a competitive advantage, the company said.
Ellerines gone
Other participants in the industry have separated furniture retail and financial services, and utilised
centralised call centre-based methods of contact with customers. Lewis does not consider such a
model appropriate or effective in addressing the needs of its target market customer.
The company pointed out that there had been widespread closures in furniture retailers that had
separated these services. It mentioned in particular the recent demise of the Ellerines Group.
Furniture retailer Ellerines went into business rescue after the implosion of its parent company
African Bank.
Lewis has 444 shops in South Africa, and another 47 stores in Botswana, Lesotho, Namibia and
Swaziland.
BUSINESS REPORT