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Court: Uber Drivers Are Independent Contractors, Not Employees

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TALLAHASSEE (CBSMiami/NSF) — Siding with ridesharing company Uber, a Florida appeals court upheld a decision by the state governor’s administration saying Uber drivers are independent contractors, not employees.

This means they are no eligible for unemployment benefits.

The unanimous decision by the three-judge panel of the 3rd District Court of Appeals stems from an unemployment claim filed in 2015 by Darrin McGillis, who spent five months as an Uber driver before the company dropped him.

Uber, which hooks up drivers and riders through a smart-phone app, requires drivers to sign a contract outlining the terms and conditions of its software platform and informing drivers that they serve as independent contractors, not employees, Judge Thomas Logue wrote in a 14-page opinion joined by judges Barbara Lagoa and Vance Salter.

Wednesday’s appellate decision is the latest in a string of victories for Uber, which has posed a major challenge to limo and taxi companies in Florida and other states.

Uber last year agreed to pay up to $100 million to settle a pair of class-action lawsuits filed by drivers in California and Massachusetts. The settlement allows Uber to continue to classify the drivers as independent contractors.

The Florida decision addressed the “changes rippling through our society” resulting from the advent of new technologies.

“In this case, we must decide whether a multi-faceted product of new technology should be fixed into either the old square hole or the old round hole of existing legal categories, when neither is a perfect fit,” Logue wrote.

Florida courts consider several factors to determine whether parties practice an independent-contractor or employee-servant relationship, the most important of which is the “extent of control … the master may exercise over the details of the work,” Logue noted.

“Due in large part to the transformative nature of the internet and smartphones, Uber drivers like McGillis decide whether, when, where, with whom, and how to provide rides using Uber’s computer programs. This level of free agency is incompatible with the control to which a traditional employee is subject,” Logue concluded.

But, in the appeal filed last summer, McGillis argued that he “was closely controlled by Uber, with every move monitored and evaluated.”

McGillis could be fired or “deactivated, as Uber calls it,” if the company was not satisfied with his performance, the former driver wrote.

“Drivers, like the appellant, perform an essential service for Uber. Without its drivers, Uber would no longer be able to generate revenue, and would cease to exist. Moreover, it is plainly apparent that Uber exerts considerable control over the means and manner that drivers carry out their work, and retains the power to terminate drivers at its discretion,” McGillis wrote.

The Florida Department of Revenue initially decided that McGillis and another former Uber driver, Melissa Ewers, had been employees of Uber. That led the company to file a protest with the Department of Economic Opportunity, which handles appeals of such issues.

The Department of Economic Opportunity slightly more than a year ago overturned the revenue agency’s finding, agreeing with Uber that McGillis and Ewers were independent contractors and were not entitled to file for unemployment insurance in Florida.

Wednesday’s ruling — which would affect approximately 20,000 Uber drivers in Florida — comes at a time when lawmakers are again considering proposals that would ban local governments from regulating companies like Uber and Lyft.

Similar proposals — fiercely opposed by taxi and limo companies — have failed the past two legislative sessions after Senate leaders balked at the notion of preempting local regulations and instead focused on issues such as insurance requirements.

(The News Service of Florida’s Dara Kam contributed to this report.)

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