This is negative for Uber on a few different levels,
Second, this ruling opens the door for unionization of Uber's drivers.
Third and more subtlely is the change in relative power between taxi drivers and Uber drivers, see links after the jump.
From the Washington Post's Wonkblog:
A case decided last week shows that the National Labor Relations Board is looking at independent contractors very differently.
For decades, taxi drivers have been classified as independent contractors, and thus unable to join unions. But a case decided last week shows that the legal ground has shifted — potentially allowing vast swaths of the industry to organize.
The case concerns taxi drivers in Tucson, Ariz., where the Office and Professional Employees International Union has been running an association for taxi drivers to advocate for their rights. That’s the case in many cities, where unions have organized taxi drivers as interest groups, but lack the power to collectively bargain with the companies they work for.
Two years ago, the union petitioned the National Labor Relations Board for an election at AAA Transportation/Yellow Cab. A regional director denied it, ruling that the drivers were independent contractors. That followed precedent in dozens of previous cases.
But the union appealed, because by that time, the full board had issued another consequential decision: FedEx Home Delivery, concerning the status of delivery drivers. In its ruling, the board laid out a new test for independent contractor status that relies more heavily on what’s called “entrepreneurial opportunity.” Rather than just theoretically being in business for themselves, the judges said, true independent contractors must have a meaningful opportunity for loss or gain. FedEx has since tweaked its business model in order to comply.
The decision paralleled another landmark ruling earlier this year, Browning-Ferris Industries, which held that employees of a subcontracted company can bargain with their employers’ employer, if it functionally controls their wages and working conditions.
“The upshot is that the board’s emphasis on workers’ real-world experiences makes it harder for companies to turn employees into independent contractors by creating the appearance that workers can ‘be their own bosses,' ” says Seattle University labor law professor Charlotte Garden.
So the Board remanded the case back to the regional director. After taking another look at the facts, he decided that the Tuscon taxi drivers didn’t qualify for independent contractor status under the new test, for a host of reasons: Drivers leased cars from Yellow Cab bearing the company logo, had to undergo training, and were required to abide by a number of rules.
Perhaps the most important factor, however, was the fact that drivers relied heavily on Yellow Cab’s dispatch system. Unlike taxis in dense urban areas, those in Tucson are rarely hailed on the street; most are sent out in response to calls. The driver rarely know anything about the nature of a job before they’re forced to accept it, the regional director found, and “few if any” drivers had been able to cultivate enough clients to survive independently....MORESee also:
As Chicago Prepares an App For Taxis to Compete With Uber, Giant Union AFSCME is Organizing Cab Drivers
What Uber Hath Wrought: The Coming Digital Labor Movement
