Uber Has 1099 Problems

The floodgates are open.

As WIRED reported yesterday, a San Francisco federal judge has ruled that California’s 160,000 Uber drivers may now file a class action lawsuit against the rideshare juggernaut.

The decision could be a major turning point in the gig economy’s “contractor or employee?” debate, which has been brewing for several years and recently became a major political talking point. Importantly, any class-action suit that moves forward—and one undoubtedly will—would likely serve as an informal precedent in other states, providing momentum for a movement propelled by mounting discontent in certain corners of the on-demand economy.

The dispute hinges on a question central to the survival of this new economy: Can we legally, economically, and ethically support a burgeoning system of workers selling goods and services in transactions enabled by online, particularly mobile connection platforms? Can we have an economy of independent contractors using apps to find business?

Or are we kidding ourselves by letting these companies classify their service providers as contractors - when they should be employees - in order to keep costs down by withholding basic and perhaps necessary protections and benefits?

Gig economy firms have taken a range of approaches in the face of this swelling scrutiny. Uber and Lyft reject the employee claim, and so do, it seems, many of their drivers. Instacart, a grocery-delivery platform, has begun to transition its contractors to part-time employee status. Homejoy, a home-cleaning service fraught with legal challenges and coverage of the difficulties associated with working as one of its cleaners, shut down in July.

There’s a lot to unpack here and The Autonomer will address these issues in the coming weeks, particularly as this suit unfolds. For now, as the sharing/gig/1099/Uber-for-X economic premise is dealt this major blow, it’s interesting to remember one thing: The near future for some of these firms might not involve employees or contractors.

You probably saw that coming.

In essence, we’re interested to see whether these platforms can navigate this storm long enough to reach the next logical iteration of this economic model, when at least the transportation/livery-focused among them transition to autonomous fleets, and skip over this tumultuous question entirely.

Check back tomorrow for a deeper look at that evolution in this week’s autonomous vehicle post: "AVision: Rideshare and Autonomous Vehicles."