Uberization Of The Labor Market

Social media and other new technologies are changing the way professional services are delivered. Individuals can make a living by renting out their homes via Airbnb or by offering rides for pay in their personal cars via Uber. Others are combining these jobs with their full-time day job.

Needless to say, our existing employment and business models are under pressure.

Recently, the Belgian Secretary of State against Fraud stated that all Uber drivers are to be considered as self-employed workers according to Belgian legislation.

A few weeks before, the Labor Commissioner of the State of California came to the opposite conclusion: in California, Uber drivers are considered (salaried) employees (Case n° 11-46739 EK of June 3, 2015).

Uber organizes its services similarly in the US and in Belgium: it provides the technological platform to connect drivers and passengers.

In developing its arguments, Uber defended itself by stating that they only supply a smartphone application which facilitates transactions between passengers and drivers. The smartphone is provided by Uber, unless the driver has his or her own.

To be able to use the platform, a contract is signed between the driver and Uber, imposing a number of strict conditions on the driver.

The California Labor Commissioner concluded that Uber drivers are to be considered (salaried) employees as:

The drivers' work is an integral part of Uber's regular business; Uber holds a pervasive control over every aspect of the drivers' work; No managerial skills are involved that could affect profit or loss; Apart from the car, there was no investment in the business. Interesting to note is that the Labor Commissioner assimilates the activities of the Uber technological platform with the transport of individuals (drivers using the platform). One could assume that Uber's primary (and only) activity is making available its technological platform. The second interesting conclusion is that a company cannot outsource its main activity to self-employed individuals.

Classification of the nature of the employment relationship in Belgium

In Belgium, the principle is that the parties freely choose whether their labor relationship is an employment agreement or a self-employed cooperation agreement. However, the parties' choice may not be contrary to the actual exercise of the labor relationship.

Anyone who works under the authority of the other party, the employer, is an employee. A self-employed person performs...