NLA President and California operator Gary Buffo on June 18 said a recent California Labor Commission ruling on an Uber driver being an employee could set a far-reaching precedent in classifying TNC drivers as employees, not independent contractors.
In what may be the Achilles’ heel of upstart transportation network companies, the California Labor Commission ruled June 18 that an Uber driver must be classified as an employee rather than an independent contractor.
The ruling made headlines considering Uber, a $50 billion “ride-sharing” service, has rejected being subject to any regulations that deem its drivers are employees — coupled with the company standing firm that it is only a free-lancer-based “technology app company” rather than a business that commands tens of thousands of drivers worldwide.
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To be clear, the commission’s ruling only applies to a single Uber driver who challenged the independent status in California. But its ripple effects could be crippling to TNCs if other states follow suit with reclassifying TNC drivers.
“The NLA is very pleased with the fair and balanced ruling, and we are committed to upholding universal standards and best practices for all companies that employ drivers for private transportation,” said NLA President Gary Buffo in a press release commenting on the ruling. “It is crucial for state and local governments to develop proactive legislation as our industry continues to evolve and the market expands,” he added.
Buffo also told LCT that given California is a “worker friendly state,” the ruling could have a ripple effect nationwide and at the federal government level in reclassifying TNC drivers to employees.
“Uber will get to appeal the ruling I believe twice, but if it stands, it can be a precedent nationwide. This is very positive for our industry,” Buffo said. He added that it is “crucial for state and local governments to develop proactive legislation as our industry continues to evolve and the market expands.”