The California Labor Commission ruled yesterday that a driver is an employee of Uber, since the company is involved in all aspects of the transaction between drivers and passengers. Obviously, Uber considers the drivers as contractors, thus not paying any benefits, social security or whatever else a traditional employee gets paid by the employer. More on that on Slate, The Guardian, Vox and others.

Now I wouldn’t jump to blame everything on Uber, that would be easy and somehow in the box. I am tempted though. Of course, employers need to pay taxes, people need to be protected in case something happens to them and yes, traditional labor protection covers that. I do feel, however, that with the rise of the sharing economy, we should maybe look beyond classic employment policies. Because in cases like Uber or similar companies, things are black and white and all the nuances in between. Someone may be getting all of their money from Uber rides, in which case she or he would be an employee and someone would share occasional rides and that would make her or him even less than a contractor. In between, there would be infinity of possibilities that are not really covered by the current legislation, probably nowhere. I know we cannot have rules to cover every possible situation. However, more than 2 categories may be needed, with some security on the side. The main point of the news I read on this was rather that Uber will lose a lot of its value if there would be more rulings like this one in various places across the world. And the guess that it will be the case. Allow me to be a little more worried about the workers though.

The question is not if Uber drivers should be all employees or not, but rather how to develop a taxation policy appropriate for collaborative consumption and sharing economy that would ensure people who actually work full time in one or two places like Uber or Lyft will be covered as a full time employees, while other options would still be open. As this article puts it, a good model would be to establish a minimum number of hours starting from which someone is assimilated to an employee and thus she or he should get the benefits and paid taxes accordingly. For now, that is up to companies. Yet, governments should regulate this in order to make sure that (1) they do not lose a whole lot of taxes due to too much employer flexibility in addressing labor rules and (2) workers will still be protected. Or another solution is the Universal Basic Income, but hey, I’m a leftist.

I feel there is room for improvements in the labor rules everywhere. I also feel that by imposing companies like Uber rules normally applied to the traditional economy would interfere with both the way they deliver services and the number of “contractors/employees” they will be willing to employ. Let us not forget that companies like Uber, while building wealth for themselves, did offer to possibility for people to get an income, in times when regular employment was (and still is) hard to find. Now, an eternal dilemma: do we want more people to earn some income regardless of the conditions (bad jobs, no benefits, no health insurance etc.) or we want fewer jobs, but more secure? Unfortunately, this is not a theoretical dilemma. People need to put food on the table at the end of the day. It is natural that they would pick up whatever work there is to be able to survive. Companies do take advantage of that. Workers do not have the luxury of considering consequences in terms of social security and benefits, and that is a fact. Imposing strict regulations on companies may reduce the available work there is. Not imposing regulations would make governments lose tax money while still having to be financially responsible for the worse off. And if very few people pay taxes, how do we expect this to work?