Startup rideshare policy in question for drivers
Rolling through the Financial District in his orange Honda Fit, SF State senior James Shumate spends his evenings shuttling passengers who hail his service.
Shumate, a cinema major, began driving for rideshare startups Uber and Lyft as his primary source of income at the end of March. He said as an Uber and Lyft driver, he works as an independent contractor, which allows him to choose his own hours. Drivers decide when they clock on and off and even have the option to deny ride requests, he said.
“I like the fact that I can open up an app and punch in,” Shumate said, “Or you know, when a customer pisses you off and you’re just like, ‘I want to go home right now,’ I can.”
Drivers from both Uber and Lyft filed suit against the startups in fall 2013, arguing they should be entitled to employee benefits. District Court judges Edward Chen and Vince Chhabria ruled in the Uber and Lyft cases, respectively, and denied summary judgement on March 11, requested by Uber and Lyft. This means no action has been taken because judges could not decide how to rule. All parties will have to wait until juries decide whether drivers are employees or individual contractors.
Both judges found reason to consider drivers employees rather than independent contractors based on how the companies decide cost of fare and the manner in which drivers interact with passengers, according to the court summaries.
“The court first concludes that plaintiffs are Uber’s presumptive employees,” Chen wrote for the Uber case, “because they ‘perform services’ for the benefit of Uber.”
As independent contractors, drivers are subject to being fired for any reason, according to both the Uber and Lyft user agreements. The agreements also note that Uber and Lyft provide a platform for riders and drivers to connect, but do not provide transportation services themselves.
“Lyft might not control when the drivers work,” Judge Chabria wrote in his order, “but it has a great deal of power over how they actually do their work, including the power to fire them if they don’t meet Lyft’s specifications about how to give rides.”
After each ride, passengers receive a notification that shows the cost of the trip and asks for a rating on a five-star system, five being the highest. Senior art major Cody Lee, a driver for Lyft, said the business requires their drivers keep a 4.8 rating. Lyft’s website says that a 4.6 rating puts drivers at risk for deactivation of their account with the app.
“I don’t think a lot of people know that,” Lee said. “If it works that way, if 4.8 is the minimum you can have, then anything below a five-star rating is failing.”
Lee, whose rating is a 4.9, said he likes his status as an independent contractor. Lee considers Lyft a part-time gig and said he wouldn’t like having to work as an employee with a minimum hour work week.
“It (having to work a minimum amount of hours) would suck for people like me that only drive during the peak hours,” Lee said, “but for people that drive full-time that would be good because I’ve heard of people that sit around waiting for like an hour and a half for someone to request a ride and get nothing.”
SF State assistant professor of management Jennifer Tosti-Kharas said she considers the drivers independent contractors but in some cases employer status is justifiable for full-time drivers.
“You could have someone that is technically a driver but works a couple hours a week, completely at their discretion,” Tosti-Kharas said. “That would never fly in a typical employer contract.”
Shumate said he believes most drivers are people like himself who only drive about six to 12 hours a week. He believes that if drivers are forced to work a minimum number of hours a week, as employees, some will stop working.
“It might change the relationship,” Shumate said. “And it might not be in a good way.”