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Uber Suit Offers Peek Into Gig Economy

5 min read

Freelancing has become a popular way to work in the current economy, but the widespread practice is not without disadvantages.

Attorney Chris Burks, who has filed a lawsuit on behalf of a Little Rock Uber driver, knows the gig economy can be a boon for independent contractors. A high-demand software developer, for example, might not want to work at one company and would rather enjoy the flexibility of picking and choosing among projects.

But the flip side of the gig economy, so named because workers take gigs rather than full-time traditional jobs, is that employers can have too much of an upper hand, Burks said. Uber and its ride-sharing competitor Lyft are two examples. Workers sign up to be drivers but don’t receive set salaries or any benefits; they’re paid primarily by the mile for driving clients to their destinations.

The drivers have to pass background and safety checks, but driving a car is not really a high-in-demand skill. Consumers favor ride sharing because it’s easy and convenience to order and pay for essentially a personal taxi through their smartphone apps.

In Uber’s case, Burks believes the company has broken the law with the way it has paid its drivers in Arkansas. In May, Burks filed a federal lawsuit in the Eastern District of Arkansas on behalf of a Little Rock driver who worked for Uber.

Burks is asking for state and federal class-action status, which would allow any Uber driver during the past three years to join the suit.

“There’s a right way to do the gig economy and contractors and there is a wrong way that runs afoul of the labor laws,” Burks said.

The crux of Burks’ argument is that Uber drivers are full-time employees of the company and are not being paid legally. Chiefly, Burks said some drivers are working well over 40 hours a week and being paid by the mile, a violation of overtime-pay rules.

“What you see now, now people are driving 40, 45, 50, 55 hours a week just to make the same amount of money,” Burks said. “Because they are working so much, they are essentially owed overtime for those hours over 40. Instead of being paid a rate by mile, they should be paid time and a half their base rates for the hours over 40.”

Second Job Becomes First

The initial attraction of driving for a shared-ride company was that many people saw it as the perfect second job, Burks said: drive a few hours at night or on the weekends, pick up some interesting people, make some supplemental cash.

In Uber’s case, Burks said, ever-changing rates and different pay models made it harder for drivers to continue to make the same amount of money without adding hours to their schedules. There was no shortage of drivers; Burks said he doesn’t have an exact number of Uber drivers in Arkansas, which operates in the main metropolitan areas, but he estimates there are at least 300 that could be affected by the lawsuit.

Burks’ suit claims that Uber violated the federal Fair Labor Standards Act and the Arkansas Minimum Wage Act by failing to pay legal wages to its drivers and failing to pay overtime for the work the drivers do over 40 hours a week.

“Uber — not just with this lawsuit but in multiple lawsuits across the country — is getting in trouble for … not paying its drivers lawfully,” Burks said. “There are a variety of things that Uber has done wrong, but … this lawsuit is for drivers who work for Uber full time more than 40 hours a week and [are] not getting paid lawfully.”

Burks said the Uber business model is a dark side of the emerging gig economy. A worker with an in-demand skill has negotiating power; with ride-share drivers, the employer has the upper hand.

“The economy is going more toward this contractor-gig economy and that big picture works when someone is actually an independent contractor,” Burks said. “When someone is using Uber’s own app 40-50 hours a week, then you no longer have a side gig. That’s your job.”

Filler Fuel

That is OK so far with drivers such as Michelle Ouillette and Jason Watson, both of Rogers. Ouillette, 51, and Watson, 49, drive for both Lyft and Uber — each keep both apps open and respond to whichever service dings in — and stand sentinel at Northwest Arkansas Regional Airport in Highfill.

Ouillette is a born job hustler — she rattles off all the part-time jobs she does or has done to pay the bills — and ride sharing is another on the list. She estimates she works 30-50 hours a week as a driver and can make up to $1,000 in an average week.

““I’m my own boss; I get to set my hours,” Ouillette said. “I get to meet people from all over the world. I’m making a living. It pays the bills.”

For Watson, driving was a gig he took up after he was laid off by Walmart, where he had worked for nearly two decades in middle management. He isn’t sure about how he is paid, he just knows he can make about $1,000 in a week by making 15-20 runs per day.

He works up to 12 hours a day six days a week. Even with all his good weeks, Watson makes half of what he made at Walmart.

“It’s a struggle,” Watson said. “It ain’t enough, but it is enough to do it for a while until I can figure out someone to hire me, eventually. I like the freedom of it right now. I can afford to do it right now. Is it sustainable? No, not at all.”

Burks said his Uber lawsuit is similar to a recent lawsuit filed against PAM Transport Inc. of Tontitown in which truck drivers allege that PAM owes them pay for the hours they are on the job even if they aren’t driving. One of the key points in the Uber lawsuit is determining if the drivers are legally employees of the company.

“There are other businesses that have similar independent contractor issues,” Burks said. “It’s not just Uber. They will keep coming up in the courts at this type of economy develops.”

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