The state of Florida has taken a position on the ride-hail industry’s recent labor debate. Yesterday, the Florida Department of Economic Opportunity decided that former Uber driver Darrin McGillis was an employee of the company, not a contractor as the company contends, and is thus eligible for unemployment insurance, The Miami Herald first reported.
When McGillis, a Florida resident and a 2010 candidate for state governor, began driving for Uber in November he went after the big money promised by the company’s lucrative UberXL service. He bought a seven-seat Mitsubishi Outlander and was soon ferrying passengers around Miami, collecting UberXL’s higher base fare.
But this past March, McGillis’ Outlander — his primary source of income at the time — was damaged when a passing scooter hit one of its back doors as an Uber passenger exited it. “Uber was crickets when I asked for help,” McGillis told BuzzFeed News.
After several weeks of back-and-forth on email and phone conversations with driver operations staffers in both the local Uber office and later at headquarters, McGillis decided to file for unemployment. “I told them, ‘You guys need to take care of this, you have this so-called insurance,’” he explained. “At that point, I said, ‘You need to buy this SUV from me. I bought this in January to be an Uber XL driver.’ They told me to take it up with Uncle Sam. I said fine, I’ll file unemployment.”
So in the second week of April, McGillis filed a claim against Uber and Rasier LLC — a subsidiary of the company — with the Florida Department of Economic Opportunity. So began a two-pronged process that requires the DEO to determine whether McGillis is an independent contractor, and the Department of Revenue has to determine whether he is eligible for unemployment.
During the filing process, McGillis continued to correspond with Uber and its attorney Jordan Cohen. The company offered the former driver a $5,000 settlement, according to emails McGillis provided to BuzzFeed News. McGillis countered, requesting $8,000. Uber did not respond.
McGillis forged ahead with his complaint against Uber. In it, he claimed he should be classified as an employee, not a contractor. Uber “directs how, where, and when drivers work,” McGillis argued in the complaint, a copy of which was provided to BuzzFeed News. “Uber drivers are employees, they are required to follow a litany of detailed requirements imposed on them by Uber and they are graded, and are subject to termination, based on their failure to adhere to these requirements.”
That’s an argument that has some teeth thanks to the IRS definition of independent contractor: “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.”
The Florida Department of Economic Opportunity’s decision, though it only applies to McGillis, comes during a nationwide debate over whether Uber drivers should be classified as employees. Early this year, Uber was hit with several class action suits alleging it wrongly classifies its drivers as contractors. One of those suits, O’Connor v. Uber, will be heard in front of a jury. In his decision to deny Uber’s motion for summary judgment in that case, Judge Edward Chen wrote: “The more relevant inquiry is how much control Uber has over its drivers while they are on duty for Uber. The fact that some drivers are only on-duty irregularly says little about the level of control Uber can exercise over them when they do report to work.”
And as BuzzFeed News reported, training classes that Uber offers deactivated drivers also raise questions about the company’s classification of its drivers.
In its order, the DEO provided no rationale for its decision on McGillis’ claim. It simply said it followed an agency investigation. Uber now has 20 days to appeal.
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