The tech industry buzzword “gig” has distracted society from important questions about the gig economy that are surprisingly traditional: whether a business has employees or contractors, and how it can avoid payroll taxes and legal liability. Countless Silicon Valley business models have been built under the guise of gigs, Uber and Lyft two of the best known cases, which is ironic considering that for all of their high-tech pretensions, at the core both are taxi and food delivery services. But with state governments like California facing increasing revenue shortfalls and an estimated 57 million gig workers in the United States noting a lack of employer protections and fair wages, the matter has shifted to the courts.

Uber and Lyft now find themselves at the centre of years-long legal disputes on this question. Court challenges, however, are now extending beyond these two companies.

Over the past 40 years, the rise of neoliberalism has enabled employers to tilt the terms of our capitalist economies heavily toward capital and away from labour, via the evisceration of unions, the deconstruction of the welfare state, and the privatization of public services. The growing use of the independent contractor classification represents the latest attempt to exploit and amplify this power imbalance. The exploitation of this labour loophole is symptomatic of the rise of what author Albena Azmanova has called “precarity capitalism” in her new book, Capitalism on Edge, a condition that Professor James Galbraith has described as “a minority ensconced in a diminishing set of safe career paths or sufficient wealth not to bother worrying about [economic insecurity], and a majority living in persistent anxiety over the costs of health, housing, education, the quality of public services and other formerly ordinary attributes of middle-class life.” What makes this trend particularly galling is that the main economic drivers of this transition to serfdom fancy themselves as enlightened, socially “woke” corporations, be they Uber, Lyft, DoorDash, or Amazon, but in fact all embrace employment practices more evocative of the 19th-century robber barons.

As the protections governing the traditional employer-employee relationship have been increasingly subverted, workers have responded by turning to the courts to rectify this loophole that has allowed their employment conditions to become a form of indentured servitude. And the courts are largely ruling in their favour. A California superior court judge has recently denied injunctive relief to both Uber and Lyft, which means that they will be forced to comply with earlier rulings, and a California state statute, that mandated them to reclassify their workers as employees (although the original August 20 deadline has now been extended until October so that the companies’ full appeal can be considered by the California Court of Appeals). The original California ruling confirms a similar ruling made by a New York federal judge in July.

These are also consistent with a growing number of decisions in other countries, such as the UK, where Uber is now appealing a lower court ruling that its drivers should be classified as employees “entitled to employment protections such as a minimum wage and holiday pay,” and in Canada, where the country’s Supreme Court has recently ruled that Uber drivers were entitled to sue for traditional benefits and vacation pay

Equally striking is some of the sharp language deployed in these proceedings against the practices. In the judgments, the courts explicitly highlighted the massive imbalance in the so-called “contractor” relationship between the companies and their respective workforces, which invalidates any notion of the “contractors” being genuinely independent. In the Canadian case, Uber Technologies Inc. v. Heller, the Supreme Court specifically cited the inequality of bargaining power between the plaintiff and Uber, noting that driver David Heller was in fact powerless to negotiate any of its terms of his engagement with the company (which largely invalidated the notion that he was an independent contractor as Uber alleged). Likewise, in the UK Court of Appeals case, Uber BV v. Aslam, the judges noted that Uber’s “drivers do not market themselves to the world in general; rather, they are recruited by Uber to work as integral components of its organization.” In other words, Uber exercises full control over them as employees, but it attempts to escape its obligations by designating the drivers as independent contractors. Consequently, the UK Court of Appeal characterized Uber’s description of the work relationship “a sham.”

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Via https://braveneweurope.com/marshall-auerback-why-courts-across-the-world-are-ruling-that-the-gig-economy-is-paving-the-road-to-serfdom