UBER Drivers & US Labor Agency: What’s in it for India?

The United States (U.S.) Government, National Labour Relations Board (NLRB), Office of the General Counsel recently released an advice memorandum (dated April 16—released on May 14) that can potentially have repercussions not only for Uber Technologies Inc. drivers in the U.S. but also those operating in India for the ride-hailing giant. The general counsel stated in its (opinion) advice memorandum that since Uber drivers themselves decide their working hours, log-in locations, whilst also being the owners of the cars driven by them, and, since Uber also supports drivers’ entrepreneurship—in a way granting them enough freedom to be able to also choose to work for Uber’s rivals, the Uber drivers should be classified as “independent contractors” (not as employees—under the U.S. federal law) of Uber. This compels drivers and their legal representatives to face a herculean task of (legally) persuading Uber to reframe its labor policy so as to classify drivers as employees.


The advice memorandum followed the 2 in progress cases against Uber where in one of them the petitioners argue that Uber illegitimately concluded relationships with those drivers who offered Uber riding services under the auspices of a “general tier of service.” In the second case against Uber, the company is charged for unlawfully dominating a labour organisation of Uber drivers in New York City. The time period for investigation of Uber’s operations considered by the counsel in the light of these charges is from February 2015 to August 2016.


As a result of NLRB tabling this opinion, it will get cumbersome for drivers to build a union, file labor complaints, or look for protection from the federal government; whilst already being ineligible for minimum wages, health insurance, and overtime pay, since they are classified as contractors. The opinion memorandum further states that the drivers do have the freedom to decide to either execute ride requirements via the App, or work for a rideshare service offered by any rival, or even pursue a totally new venture.


This opinion from NLRB for independent contractual workers is preceded by the U.S. Department of Labor (DOL) opinion letter dated April 29, 2019, in which it specifically mentioned that workers in the “sharing” economy cannot be considered employees under the Fair Labor Standards Act (FLSA). The DOL, having used the six-factor test of the U.S. Supreme Court—the six-factor test is meant to determine if a worker with the “virtual marketplace company” is an independent contractor or an employee of that entity. It should still be noted that the advice memorandum is not a court ruling with a legal authority. It is worth noting that in the preceding week, hundreds of Uber drivers initiated strikes before the Initial Public Offering (IPO). Drivers asked for fine working conditions and enhanced transparency from Uber in regards to wages and platform access.


Following its India launch, Uber India has time and again restated that its drivers are partners (contractors) and not to be mistaken as employees. Considering the conclusions drawn by labour counsel and since the drivers are allowed to work for rivalling ride-hailing platforms, as well; the drivers opt to also work for the primary competitor of Uber in India, Ola. Voicing their dissatisfaction, these drivers (contractors) have often times protested (via strikes) against reduced earnings over a period of time, owing mainly due to minimal wages, and also for rendering them helpless in being able to pay back their loans. While initially as the ride-hailing business paved its way in the market, the advertised communications carried the message of deep discounts for customers and elevated earnings for drivers. With the passage of time the benefits for drivers and customers were snatched away, soaring drivers’ discontent level. With the U.S. Department of Labor and U.S. federal government approving and acknowledging Uber drivers as contractors (and not employees), the fate of global Uber drivers’ working conditions and wellbeing remains gloomy.