The Strategist

To Hire or Not to Hire? That's the Question


07/27/2015 - 16:16



Many startups are built on the model of independent contractors. If you have time and desire - you can earn by giving a ride, clean someone's apartment or go shopping. However, such services are faced with a serious challenge.



Steven Depolo via flickr
Steven Depolo via flickr
They are made to legally hire their voluntary employees. The movement for the rights of those who work freelance for numerous start-ups, is gaining momentum. Why the same Uber not to hire its many drivers, giving them all guarantees and privileges, granted to employees, rights activists are asking for the working class. Often the activists go to court with this requirement, leaving aside the question of whether they want to do freelance recorded in the state.

At the court session July 9, 2015 Uber joined the statement of its 400 drivers from California that they would prefer to maintain the status of independent contractors. Among other things, the drivers do not want to lose the flexible schedule and the ability to work in multiple locations, without asking permission of the employer.

The move is Uber’s response to the class action lawsuit against the company. It is accused of using thousands of drivers in California as employees but paying them as independent contractors.

Uber is trying to prove that it cannot be a class action, since many of the people themselves do not want to be considered to be employees.

 - The plaintiff is not and cannot be representing the interests of thousands of other drivers who appreciate a flexible schedule, and the autonomy of the contractor, - said a partner at the law firm Gibson, Dunn & Crutcher, Ted Boutrous, advising Uber on this lawsuit.

"Flexible" became a fashionable expression of dozens of startups rushing to defend their model of hiring. Everyone, from the Uber and Lyft to Postmates, proclaim themselves as pioneers of giganomics, where employees themselves set working hours as easily as open and close the smartphone app. Because of this, the leaders of the start-ups emphasize, people spend more time with their families, or they may take up education and career.

However, the workers themselves are paying for the flexibility. Not everyone likes to pay for health insurance, or to give money for the maintenance of the car and petrol. In June, Uber was obliged to compensate its former driver from San Francisco, Barbara Berwick, more than $ 4,100 for work-related expenses such as amortization of the machine. The plaintiff managed to prove that the company was taking such an active part in all aspects of her work, that actually played the role of employer.

A number of start-ups offered the freelancer hiring to play it safe. Service for delivery of products from local shops Instacart said it was ready to employ people, making purchases instead of customers, as workers with part-time work. Service for sending parcels Shyp plans to offer hundreds of couriers in San Francisco, Los Angeles, Miami and New York to become salaried employees next year.

Berwick’s case juridically does not serve as a precedent for all drivers. Uber is trying to expose the incident as an exception, proving that, with rare exceptions, the drivers prefer the independence from staff bondage. The company, which is estimated for the $ 50 billion, has more than 200,000 drivers.

- I don’t want to be Uber’s staff, - told a driver from Los Angeles Christopher Martinez to the court. - I know firsthand how California law regulates the relations of employer and employee seniority, thanks to working for Coca-Cola. And I'm not interested in this to happen once again.

In court, Uber appealed to a study conducted earlier this year. The company’s three drivers out of four were in favor to establish the work schedule by themselves, rather than to work nine hours a day five days a week. Uber’s data, and the results of a survey of 601 driver were the basis of this study, carried out by Benenson Strategy Group.

But, perhaps, drivers find repugnant not the general idea of legal employment but of work as Uber’s staff? Javier Calix from San Francisco admitted that if the company offered him the opportunity to settle in the staff, he  would not agree. The company, according to Calix, does not offer an attractive salary. Having started in Uber two years ago, he earned about $ 25 per hour, taking into account spending on gasoline and other expenses. Now, after the deduction of fees, it is $ 15. "I just cannot afford to go to the state under such conditions", - says Calix.

source: wsj.com