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Regulatory Risks Faced by the Transportation Sharing Economy: Workforces at Stake

Published online by Cambridge University Press:  08 February 2019

Ana Maria CORRÊA
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Extract

The rise of sharing economy platforms is ubiquitous throughout the world.1 Their success is attributed to the fact that they directly connect supply and demand by enabling individuals to share goods and personal services, with minimal initial barriers to entry. In addition, they outsource their workforce – making it less expensive and easier to expand internationally. Similar to other global supply chains, workers are mediated by a third party and technology is fundamental to that.2

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Articles
Information
European Journal of Risk Regulation , Volume 9 , Issue 4 , December 2018 , pp. 641 - 654
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© Cambridge University Press 

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Footnotes

*

PhD Researcher at the Université Libre de Bruxelles, Perelman Centre. Her research is funded by CAPES Foundation. Email: amacedoc@ulb.ac.be. The author would like to thank Arnaud Van Waeyenberge (HEC Paris), David Restrepo (HEC Paris), Benoit Frydman (ULB), Isabelle Rorive (ULB) and Joana Vasconcelos (UCP Lisboa) for their insightful comments and suggestions.

References

1 See for different regulatory problems faced by online platforms/sharing economies, Lobel, O, “The Law of the Platform” (2016) 101 Minnesota Law Review 88Google Scholar.

2 Wexler, M, “Reconfiguring the Sociology of the Crowd: Exploring Crowsourcing” (2010) 31 International Journal of Sociology and Social Policy 6CrossRefGoogle Scholar; Felstiner, A, “Working the Crowd: Employment and Labor Law in the Crowdsourcing Industry” (2011) 32 Berkeley Journal of Employment & Labor Law 143Google Scholar; A Kittur, “The Future of Crowd Work” Proceedings of the 2013 Conference on Computer Supported Copperative Work, available at <www.lri.fr/~mbl/ENS/CSCW/2012/papers/Kittur-CSCW13.pdf >.

3 Agrawal, A and others, “Digitization and the Contract Labor Market: A Research Agendatle” in A Goldfarb, SM Greenstein and CE Tucker (eds), Economic Analysis of the Digital Economy (University of Chicago Press 2015)Google Scholar; Abramovsky, L and Griffith, R, “Outsourcing and Offshoring of Business Services: How Important Is ICT?” (2006) 4 Journal of the European Economic Association 594CrossRefGoogle Scholar.

4 WSIS Declaration of Principles – Building the Information Society: a Global challenge in the new millennium – Document WSIS-03/Geneva/Doc/4-E/2003, para 47, available at <www.itu.int/net/wsis/docs/geneva/official/dop.html >.

5 European Commission (2016) The use of collaborative platforms – Flash Eurobarometer 438, in <ec.europa.eu/COMMFrontOffice/PublicOpinion/index.cfm/ResultDoc/download/DocumentKy/72885 >.

6 De Stephano, V, “The Rise of the Just-in-Time Workforce: On-Demand Work, Crowdwork, and Labor Protection in the Gig-Economy” (2016) 37 Comparative Labor Law & Policy Journal 471Google Scholar; Aloisi, A, “Commoditized Workers: Case Study Research on Labor Law Issues Arising from a Set of on-Demand/Gig Economy Platforms” (2016) 37 Comparative Labor Law & Policy Journal 653Google Scholar.

7 UK Government, Good Work: A Response to the Taylor Review of Modern Working Practices, February 2018, available at <assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/679767/180206_BEIS_Good_Work_Report__Accessible_A4_pdf >.

8 Rogers, B, “The Social Costs of Uber” (2015) 82 University of Chicago Law Review Dialogue 85Google Scholar; Milles, S, “First Principles for Regulating the Sharing Economy” (2016) 53 Harvard Journal on Legislation 147, 165Google Scholar; Ranchordas, S, “Does Sharing Mean Caring? Regulating Innovation in the Sharing Economy” (2015) 16 Minnesota Journal of Law 413, 433Google Scholar; Cohen, M and Sundararajan, A, “Self-Regulation and Innovation in the Peer-to-Peer Sharing Economy” (2015) 82 University of Chicago Law Review Dialogue 116, 116Google Scholar; Katz, V, “Regulating the Sharing Economy” (2015) 30 Berkeley Technology Law Journal 1067, 1070Google Scholar.

9 O’Connor v Uber Technology Inc, 82 F Supp 3d 1133, 1135-38 (ND Cal 2015) (hereinafter, O’Connor v Uber); Yucesoy et al v Uber Technology Inc et al, Civil Action No 1:14-cv-13938-IT, US District Court for the District of Massachusetts (hereinafter Yucesoy v Uber); Cotter v Lyft Inc, 60 F Supp 3d 1067, 1070 (ND Cal 2015).

10 Cotter v Lyft Inc, supra, note 9.

11 The TNC Lyft was also sued in a class action for misclassification of the drivers as independent contractors: see Cotter v Lyft, supra, note 9. I chose Uber because of its global dimensions.

12 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, p 8.

13 In 2015, the District Court in Massachusetts transferred the Yucesoy case to California, to be decided with the O’Connor case, because the plaintiffs had agreed by contract that the state and federal courts in San Francisco, California, enjoy exclusive jurisdiction over all claims arising out of or in connection with the licensing agreement or plaintiff’s use of Uber’s technology: Yucesoy v Uber, supra, note 9, p 14.

14 Yucesoy v Uber, supra, note 9, Memorandum of Law in Support of Defendants’ Motion to Dismiss or in the Alternative to Transfer Venue, p. 4.

15 California Labor Code § 2802 states that “an employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful”.

16 Amount estimated by the plaintiffs: O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, p 23.

17 Aslam v Uber London Case 2202551/2015, Employment Tribunal, London, pp 3–7 (hereinafter, Aslam v Uber London).

18 33a Vara do Trabalho de Belo Horizonte, Rodrigo Leonardo Silva Ferreira v Uber do Brasil Tecnologia LTDA, Processo n 0011369-34.2016.5.03.0112.

19 Conseil de Prud’Hommes de Paris, Florian Menard v SAS Uber France, Uber BV, n F 16/11460.

20 See <www.uber.com/legal/terms/gb/ >, “Terms and Conditions”, under “Payment”.

21 ibid.

22 ibid, “Terms of Use”, under “Acceptance of Booking as Agent of the Transportation Provider”.

23 See <www.uber.com/en-GB/drive/resources/get-started/ >. These requirements can vary in different jurisdictions, although they are very similar.

24 These requirements were found in the judicial decisions: O’Connor v Uber Technology Inc, supra, note 9, p 3 and Aslam v Uber London, supra, note 17, pp 3–16.

25 Cases around the world about the company’s technology identity were contested for different regulatory purposes: unfair competition and lack of licences: Spain (Asociacion Madrileña del Taxi v Uber Technologies INC, Juzgado de lo Mercantil No 2, Madrid, Recurso 707/2014, 9/12/2014 and Case C-434/15, Asociación Profesional Elite Taxi v Uber System Spain Case); Belgium (AS Radio Taxi Bruxellois v SPRL Uber Belgium, Tribunal de Commerce de Bruxelles, Chambre des Actions en Cessation, 31/03/14); France (Uber France SAS, Conseil Constitutionnel, Décision n° 2015-484 QPC, 22/09/2015 & Uber France, Cour de Cassation, Arrêt n 699, 23/06/2015); Italy (Soc Coop. Taxiblu e altri v Uber international holding BV a altri, Tribunale di Milano, ordinanza, 9/07/2015); Germany (Taxi Deutschland Servicegesellschaft v Uber BV, Landgericht Frankfurt am Main, Zivilkammer, Aktenzeichen 2-03 O 329/14, 25/08/2014); Canada (City of Toronto v Uber Canada Inc, Uber BV and Rasier Operations BV, Ontario Superior Court of Justice, 2014); Brazil (Simtetaxi, sp Sindicato dos Motoristas e Trabalhadores nas Empresas de Taxi no Estado de São Paulo v Uber do Brasil Tecnologia Ltda, Tribunal de Justiça do Estado de São Paulo, 12a Vara Cível, Processo digital 1040391-49.2015.8.26.0100); Taxation: Australia (Uber BV v Commissioner of Taxation, Federal Court of Australia, NSD 904 of 2015, 17/02/2017); discriminatory treatment: USA (National Federation of the Blind of California v Uber Technologies, Inc, United States District Court, California, 2015; Thomas Liu v Uber, Equal Employment Opportunity Commission, 2014); misclassification of workers: Brazil (Rodrigo Leonardo Silva Ferreira v Uber do Brasil Tecnologia LTDA, 33a Vara do Trabalho de Belo Horizonte, 13 de Fevereiro de 2017. Processo n. 0011369-34.2016.5.03.0112); UK (Aslam v Uber London), USA (O’Connor v Uber and Yucesoy et al v Uber Technology Inc et al, Civil Action No 1:14-cv-13938-IT, US District Court for the District of Massachusetts).

26 C-434/15 Asociación Profesional Elite Taxi ECLI:EU:C:2017:981.

27 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, pp 11–15; Aslam v Uber London, supra, note 17, p 27.

28 Yucesoy v Uber, supra, note 9, Memorandum of Law in Support of Defendants’ Motion to Dismiss or in the Alternative to Transfer Venue, p 1.

29 See <www.uber.com/fr/legal/terms/us/;https://www.uber.com/fr/legal/terms/gb/ >; <www.uber.com/fr/legal/terms/br/ >.

30 See <www.uber.com/fr/legal/terms/gb/ >.

31 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, pp 4–5.

32 ibid, p 9.

33 ibid, p 11.

34 Aslam v Uber London, supra, note 17, p 27.

35 See <www.uber.com/en-GB/ >.

36 Aslam v Uber London, supra, note 17, p 17.

37 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, p 3.

38 In an internal document called “SF Hiring Freeze & Quality Push”, Uber stresses that these screening measures are important because Uber provides the best transportation service “… and to keep it this way, we will be taking some major steps to improve both driver and vehicle quality on the Uber system”: O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, p 12.

39 Service Agreement at 7, Other Provisions, see <www.uber.com/legal/terms/us/ >.

40 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, p 21.

41 Aslam v Uber London, supra, note 17, p 14.

42 ibid, p 15.

43 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment; Aslam v Uber London, supra, note 9.

44 Email from UBER SF Community Manager instructing a fellow Uber employer to “get rid of this guy. We need to make serious cuts of guys below”: O’Connor v Uber, Order Denying Defendants Motion for Summary Judgment, p 11.

45 ibid; Aslam v Uber London, supra, note 17.

46 FedEx controlled the appearance of its drivers and their vehicles, their worktime, and how and when they should deliver the packages: Alexander v FedEx Ground Package Sys Inc, Case No 05-cv-00038-EMC (ND Cal 2016), pp 16–20.

47 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, pp 18–19.

48 Rubistein, M, “Our Nation’s Forgotten Workers: The Unprotected Volunteers” (2006) 9 Journal of Labour and Employment Law 147Google Scholar. See the tensions about the classification of workforce in the “on-demand” economy: Means, B and Seiner, JA, “Navigating the Uber Economy” (2016) 49 University of California Davis Law Review 1511Google Scholar; Cunningham-Parmeter, K, “From Amazon to Uber: Defining Employment in the Modern Economy” (2016) 96 Boston University Law Review 1673Google Scholar.; Cherry, MA, “Beyond Misclassification: The Digital Transformation of Work” (2016) 37 Comparative Labor Law & Policy Journal 577Google Scholar.; Rogers, B, “Employment Rights in the Platform Economy: Getting Back to Basics” (2016) 10 Harvard Law & Policy Review 479Google Scholar.

49 NLRA, s 2 §152: “The term ‘employee’ shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise”.

50 FLSA, s 203 § 203. Other Federal regulations define employees in the same way: the Employment Retirement Income Security Act (ERISA) of 1974; the Family and Medical Leave Act (FMLA) of 1993; the Civil Rights Act of 1964, title VII, the Age Discrimination in Employment Act (ADEA) of 1967; American with Disabilities Act, 1990.

51 The NLRB is a US governmental agency responsible for investigating and prosecuting unfair labour practices mainly in the cases that have interstate commerce. For more information see <www.nlrb.gov >.

52 Rubistein, supra, note 48, 161.

53 Zatz, N, “Working Beyond the Reach or Grasp of Employment Law” in A Bernhardt and others (eds), The Gloves-Off Economy: Workplace Standards at the Bottom of America’s Labor Market (Cornell University Press 2008) p 35Google Scholar.

54 Rubistein, supra, note 48.

55 Nationwide Mutual Insurance Co v Darden 503 US 318 (1992).

56 Davidov, G, “The Three Axes of Employment Relationships: A Characterization of Workers in Need of Protection” (2002) 52 The University of Toronto Law Journal 357, 368–369CrossRefGoogle Scholar.

57 Jost, M, “Independent Contractors, Employees, and Entrepreneurialism Under National Labor Relations Act: A Worker-by-Worker Approach” (2011) 68 Washington & Lee Law Review 311, 334–335Google Scholar.

58 SG Borello & Sons, Inc v Department of Industries Relations, Case No S003956 (SC Cal 1989).

59 O’Connor v Uber, supra, note 9, Order Denying Plaintiffs Mot for Preliminary, p 17.

60 Byrne Brothers (Formwork) Ltd v Baird [2002] IRLR 96; Bates van Winkelhof v Clyde & Co LLP [2014] UKSC 32; Cotswold Developments Construction Ltd v Williams [2006] IRLR 181.

61 Employment Rights Act 1996, s 230(1).

62 Deakin, S, “Interpreting Employment Contracts: Judges, Employers, Workers” (2004) 20 International Journal of Comparative Labour Law and Industrial Relations 201Google Scholar.

63 ibid, p 202.

64 Aslam v Uber London, supra, note 17, p 29.

65 See <www.uber.com/fr/legal/terms/gb/ >.

66 Aslam v Uber London, supra, note 17, p 28.

67 ibid, p 40.

68 Appeal No UKEAT/0056/17/DA.

69 The entire terms of the agreement can be found at O’Connor v Uber, supra, note 9, Notice of Motion and Motion For Preliminary Approval and Memorandum of Points and Authorities In Support Thereof.

70 Other factors, less pertinent to this paper’s analysis, were also considered, such as: (a) whether they drove in California or Massachusetts; (b) if they drove in California, whether they were a member of the certified class in O’Connor; (c) whether they opted out of Uber’s arbitration clause: O’Connor v Uber, supra, note 9, Notice of Motion and Motion for Preliminary Approval and Memorandum of Points and Authorities in Support Thereof, p 6.

71 Except in cases of fraud, safety, discrimination or illegal conduct: ibid, p 8.

72 ibid, p 9.

73 ibid, p 2.

74 Based on evidence, it was estimated that in mileage expenses alone, drivers were due a reimbursement at an average of $700 million. A sum of $30 million was due for reimbursement of data usage charges on their phones, $122 million on tips and $2.4 million for overtime work. In total, Uber should pay its drivers in the United States, if they were reclassified as employees, $854.5 million, instead of the $100 million offered in the settlement. In addition, in 2015, the California Labor Commission decided that a driver who had filed a complaint should earn five times more than what was offered in the settlement: O’Connor v Uber, supra, note 9, Order Denying Plaintiffs’ Motion For Preliminary Approval, p 8.

75 ibid, p 10.

76 The judge considered that the platform preserved it management power in cases of a driver’s declination of a ride. In cases of low acceptances rates, Uber still has the power to log out the driver: O’Connor v Uber, supra, note 9, pp 24–25.

77 O’Connor v Uber, supra, note 9, Order Denying Defendants Motion for Summary Judgment, pp 4–5.

78 See <www.uber.com/en-GB/drive/ >.

79 Tribunal Regional do Trabalho da 3a Região. 09a turma, Rodrigo Leonardo Silva Ferreira v Uber do Brasil Tecnologia LTDA 23 May 2017.

80 In the field of transportation particularly, many judicial disputes related to the misclassification of the drivers have been raised over the decades. In the United States, see Rutherford, W, “Fitting a Square Ped Into a Round Hole: Alexander v. Fedex Ground Packages Systems & the Sharing Economy” (2016) 11 Liberty University Law Review 33, 42Google Scholar.