Does Uber legally employ their drivers?

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Uber is a transportation company founded on creating affordable easy ride sharing for all individuals. From its inception the business plan of Uber was built on a system that made ride sharing accessible and safe for all ages to use. The system has proved to be smart, economical and popular amongst those who need a quick ride across town, tourists in a new city, or to give temporary assistance to those who simply find themselves stranded or experiencing issues with their own personal vehicle.


For the passenger, there are few if any legal issues with using Uber services. But for the driver and for the company itself legal issues have started to surface.


The most prevalent issue is whether Uber drivers are independent contractors or employees of Uber. This issue has been addressed in the United States and Great Britain, and recently in Australia. There are very specific criteria that determine if a person working for a company is considered an employee or an independent contractor.


The factors defining a worker as an independent contractor include the;

  • Degree of control over the work
  • Schedule of hours worked
  • Expectation of longevity and type of the work
  • Risk bearer
  • Benefits
  • Provision of tools and equipment to do the work
  • Responsibilities for payroll tax
  • Method of payment for services rendered
  • Time Off


With careful assessment of each of these factors the answer to employee versus independent contractor can be determined. For example if the work is under the direction and control of the employer such as handing out tasks or particular projects, it is more likely that a worker will be found an employee. Furthermore if the employer sets the schedule or expects a worker to be present every day for a set number of hours the worker is more likely to be found an employee.


In the case of Uber drivers, the NSW courts determined that based upon these factors Uber drivers are independent contractors. As an Uber driver the worker maintains control over the hours and expectation of their work. The driver sets their own schedule, decides which fares they are willing to take, and takes each fare as a separate self-determined task for completion.


In addition while Uber drivers do have insurance for their work, they assume the risk of using their own vehicles and the ongoing and increased wear and tear to their cars. The Uber driver remains solely responsible for the maintenance and condition of their vehicle. Hence, this also meets the independent contractor requirement of the worker providing their own tools and equipment for the available work.


In addition, drivers are responsible for their own tax implications. Uber does not withhold income tax on behalf of their workers. Furthermore, Uber drivers are not given any form of paid time off, benefits or required to wear a uniform that identifies them as an Uber employee. It is the combination of all of these factors that caused the Australian courts to determine that Uber drivers are not employees of Uber. 


Before deciding to become an Uber driver, it is important that individuals take the time to learn about the requirements and restrictions of the job. All Uber drivers must meet the following criteria;

  1. Be at least 18 years of age
  2. Possess a valid driver’s license for at least 12 months in the past 2 years
  3. The driver’s license must have been issued in Australia
  4. Obtain a passenger transport license code from Uber
  5. Be aware that Uber can cancel your driving account upon their own discretion


In addition, upon making an application to become an Uber driver you must provide the following;

  • In addition to a valid driver’s license you must produce a valid passport
  • Undergo a criminal background check
  • Provide proof of vehicle insurance
  • Submit your driving record
  • Up to date vehicle inspection


As a final note, the law in New South Wales has recently changed to require Uber drivers to exhibit a particular Uber logo sticker in their vehicle window to properly identify them as a car for hire. In addition, to create a distinction between Uber drivers and Taxi drivers, the law states that an Uber driver cannot mimic the markings of a taxi driver. Finally, the law recognises a difference between Taxis that continually drive within particular areas looking to pick up passengers, verses an Uber driver who is called upon by a specific individual for a specific pick up point.


Using or driving for Uber can be very beneficial for both the driver and the passenger. The presence of Uber gives ride sharers additional choices for getting from place to place. In addition, driving for Uber can be an excellent supplement to a more traditional salary. If both the driver and the rider maintain a level of professionalism and respect, the ride can be successfully engaged in, and benefits can be conferred equally on the driver and the passenger.


In the event that you find yourself with questions or concerns about the use of Uber as a passenger or a driver, please contact the offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.


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