Uber is making headway in getting states to support its business model, which classifies drivers as independent contractors rather than employees.

The model has been disputed in states such as California, where drivers contend in a class-action lawsuit that they should be treated as employees, which would entitle them to back pay and reimbursement of expenses.

But, according to Reuters, state legislators in Ohio and Florida are now joining North Carolina, Arkansas, and Indiana in moving ahead with regulations requiring that drivers for Uber and other ride services be designated as contractors in new laws governing so-called transportation network companies.

Uber contends that its model is valid because its smartphone app simply connects riders and drivers, who own their cars and pay their own expenses.

“The contractor requirement in the new state laws could help Uber limit the potential damage if it were to lose the California lawsuit and also head off similar challenges in other states,” Reuters noted.

In Ohio, state Rep. Bob Hackett said Uber, Lyft, the taxi industry and other parties were involved in drafting the transportation network bill.The state Senate cleared the bill on Wednesday, sending it to the House, and it is expected to be approved.

“I believe they are independent contractors. And the bill says the State of Ohio believes that they are independent contractors,” Hackett told Reuters.

In Florida, the legislation passed a state House committee on a bipartisan 10-1 vote. “In Florida we want to be an inviting economic climate for people exercising their own liberty, to make their own choices about employment,” said Florida state Rep. Matt Gaetz, adding that the variations among Uber drivers, with some working long hours and others doing it on the side, supports the independent contractor model.

But Shannon Liss-Riordan, who represents drivers in the California class action, believes such bills “dock” workers’ rights. “It is somewhat scary they are trying to bury that provision in the legislation,” she said.

Bills on the designation of Uber drivers have also been introduced in New Jersey and Alabama but have not been enacted.

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One response to “New State Laws Support Uber’s Business Model”

  1. I am in favor of any innovation in Taxi industry as introduced by Uber as a Business Model. But it very strange a business is running and operating but no legislation has been passed. Even when the uber established its business how this model was approved where the revenue is gone how it was taxed these all issues should be resolved first. Even in Australia the business is going illegally but still running. But believe that the business model must be very carefully analyzed by the USA as it has to be followed through out the world. The USA has left the other world to decide and think about the employees whether they are contractor or employees. Hence I believe they should be clarified as early as possible. However, the insurance of passenger and driver should also be take into consideration. In case of damage to customers who will be responsible. The Safety of the driver is also as important. Hence it should be take into account that only the uber is earning and the drivers have been deprived of their rights. However, I suggest if a driver works more than 40 hours per week then he must be considered as employee and below that threshold he must be considered as contractor. And for that period he must be given the facility of drivers.

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