Different Rights For Different Workers - Drivers And Riders Engaged Through Apps

• Published date: 21 February 2023
• Subject Matter: Corporate/Commercial Law, Employment and HR, Corporate and Company Law, Contracts and Commercial Law, Health & Safety, Employee Benefits & Compensation, Employee Rights/ Labour Relations
• Law Firm: D'Empaire Reyna Abogados
• Author: Victorino M'rquez

I. Introduction

The so-called on demand economy, sharing economy or gig economy is based on digital platforms or apps that act as intermediaries between final customers and service providers.

A few examples on platform intermediation of on-demand work are Uber, Lyft, Cabify and Didi Chuxing, involving non-public transportation of people; Deliveroo, Glovo, Uber Eats, Take It Easy, Pedidos Ya and Meituan Dianping when it comes to food delivery services; Mechanical Turk and Upwork in the areas of occasional online micro-tasks; and Task Rabbit involving domestic tasks.²

The growth of "on demand economy" or "gig economy" has revealed the shortcomings of the worker-independent contractor dichotomy in addressing the new forms of work engaged through digital platforms. While it may be true that service providers work "at their own will" and "for whoever they want" (they may work for several platforms and accept or refuse orders), and that they frequently use this sort of work arrangement as a "side gig" to their main occupation, such service providers may also be subject to an important degree of control from the platform owner ("not work at will"), on which they may also have an economic dependency. The imminent rise of these work forms in Venezuela leads us to ask ourselves: Is the employment test conceived through Venezuelan case law, appropriate to classify and govern the new work forms in a digital economy? Should the judges be responsible for settling employee/independent contractor disputes on a case-by-case basis? Or rather, should legislature be set to the task of designing a specialized employment test adapted to the new work forms in an on demand economy in order to ascertain who may or may not have access to the protections afforded by labor laws under an "all" (employee) or "nothing" (independent contractor) approach? Or should the legislator opt towards the creation of an intermediate category between employee and independent contractor in which certain, but not all labor rights are granted? Which option is better to incentivize occupation through digital platforms as part of a recovery program for Venezuelan economy?

This paper focuses on the relationship between drivers and riders, on one side, and companies with apps that allow them to engage transport and delivery services, on the other. We do not address occasional work contracted through digital platforms (crowdsourcing) in the form of micro-tasks (domestic works, translations, web page designs, and digital publicity, video production and editing, virtual assistant, among others), which bring about lesser issues regarding their classification and regulation.³

II. The business model of ride-hailing services or ride-sharing services engaged through apps.

Intermediary technology companies develop an app that establishes a communication channel between clients who require transport and private drivers who offer it. The company may predefine certain eligibility requirements for drivers to register and use the app, such as, for example, the need for the vehicle to meet certain conditions, driver's license and absence of criminal records. The driver decides when she connects/ logs on to the platform and what rides (clients) she accepts or not. Drivers also decide the route for each destination, even though the app may suggest a quicker track. Once the ride is completed the client is given the opportunity to rate the service. The price for the ride is set by the app based on a dynamic algorithm that processes supply and demand for various zones and hours of the day. The customer, who has previously provided her bank information, pays to an account (generally an escrow account) from which the rate charged to the client is distributed between the intermediary company and the driver. Drivers may offer their services simultaneously through several competing platforms or combine their driver activity with a subordinate employment at a company of an alternate business branch.

III. The relationship between drivers and companies owning apps in the light of comparative case law.

Conclusions reached by comparative case law on whether drivers are employees or independent contractors have been disparate and at times contradictory.

The High Court of Brazil in a decision dated 08/28/2019⁴ found that drivers engaged through the app do not hold a hierarchical relation with Uber because their services are provided eventually, without a predetermined schedule or fixed salary, which was deemed enough to rule out the existence of an employment relationship between the parties. The Court concludes that the drivers are independent entrepreneurs.

The Fair Work Commission of Australia, in decisions dated 07/12/2019 and 12/21/2017⁵ applied the established test for identifying an employment relationship, only to conclude that an Uber was not an employee covered by the law against unfair dismissal, and could not even be considered a temporary worker. In this decision a detailed account of the indicia of the employment test was examined: (i) Control: the driver had complete control in providing services, deciding himself when to accept and reject rides (albeit the Commission concedes that the imposition of service standards and pricing parameters could limit the driver's control to a point). (ii) Equipment: the driver provided his own vehicle, phone and mobile data and funded his own insurance. (iii) Uniform: the services agreement prohibited the driver from wearing a uniform, Uber distinctive or displaying the Uber logo on his car. (iv) Taxes: the driver was registered with the social security as an autonomous entrepreneur. (v) How the services agreement categorized the relationship: the agreement described Uber as a payment collection agent and provider of technology services. (vi) Payment method: the driver shared the fee charged to...