Bumpy Ride: How Rideshare Programs Are Challenging Worker Classification And Raising Questions About A Potential Need To Modernize Classification Standards

Rideshare services, which typically work by having users arrange rides using mobile apps on their phones with drivers who decide whether they want to provide a ride to a user at their discretion, have grown immensely in popularity over the last several years. This growth has not come without challenges, however, often coming from lobbying and other political efforts by taxi and entrenched transportation companies concerned about eroding market share. Another area of scrutiny affecting rideshare companies concerns their use of independent contractor relationships, as most drivers signing up with rideshare services are engaging with these companies as independent contractors.

As we have previously noted, the use of independent contractor relationships has come under increasing scrutiny in past years. Companies that get it wrong can face not only high stakes litigation, but also scrutiny from federal and state tax agencies, as well as labor organizations and pension