Uber driver wins state Supreme Court ruling on benefits
In a move seen as a victory for gig workers, the Pennsylvania Supreme Court has ruled a Philadelphia Uber driver was not selfemployed and, consequently, should have been eligible for unemployment compensation.
The 5-2 decision, which the state Supreme Court decided in late July, did not make blanket decisions about how ride-hailing drivers would be classified moving forward. But it could open the door to more benefits such as unemployment compensation that have typically been off-limits to those working in the gig economy.
“Since these companies first started operating, drivers have been cut off from vital societal safety nets like unemployment compensation,” Julia SimonMishel, an attorney with Philadelphia Legal Assistance who argued Donald Lowman’s case, wrote in an email.
“If a driver gets deactivated, or
cannot drive due to a health reason, they have no access to unemployment benefits,” she wrote. “The pandemic has made it clear how important these benefits are to keeping people economically stable during traumatizing times.”
Though gig workers, self-employed and independent contractors are typically not eligible for unemployment compensation, they have been able to temporarily receive benefits under the Pandemic Unemployment Assistance program, a new federal program to extend unemployment benefits amid the COVID-19 pandemic. Right now, that program is set to last through the end of 2020.
But that wasn’t the case in 2015, when Mr. Lowman lost his job as a behavioral health specialist and began driving for Uber in Philadelphia while his unemployment compensation application was pending.
The Pennsylvania Department of Labor and Industry later determined Mr. Lowman was not eligible for benefits because his time spent picking up passengers for Uber meant he was selfemployed.
While driving, Mr. Lowman made about $350 a week, according to court documents.
After an appeal and a petition for reconsideration, Mr. Lowman filed a petition for review in the Commonwealth Court in 2016, which reversed the decision and ruled he had not been self-employed. The Pennsylvania Supreme Court upheld that ruling in its July 24 decision.
The ruling is not the first time courts have gotten involved in how to classify ride-hailing drivers. Last week, Uber and Lyft drivers in New York won the right to immediately receive unemployment insurance benefits after a federal judge ruled the state’s Department of Labor was taking too long to make payments. A New York court also determined last year a handful of drivers should be considered employees for the purposes of unemployment insurance.
In California, lawmakers passed legislation last year that made it harder for employers to classify workers as independent contractors. Along with some other companies that rely on gig economy workers, Uber spent millions to fight the California law, maintaining drivers were independent contractors.
When asked about the Pennsylvania case, an Uber spokesperson pointed to a May report from the blogger Rideshare Guy that found 71% of drivers surveyed wanted to be independent contractors. That figure was 81% prior to COVID19.
In the Pennsylvania case, the state’s high court went out of its way to make clear this ruling did not determine employment status, Uber noted.
“The court did not make a determination on the employment status of this driver and the ruling does not say the driver was an employee,” Uber said in a statement.
“However, while this decision did not determine the driver’s status, we stand ready to work with the Commonwealth to modernize our laws so that independent workers receive new protections while maintaining their flexibility.”
Ms. Simon-Mishel, the lawyer arguing Mr. Lowman’s case, says the reasoning behind the ruling could apply broadly to all drivers for ride-hailing companies. “The court focused almost entirely on Uber’s conduct and communication, rather than anything individual to my client,” she said.
For ride-hailing drivers who can’t work from home and who rely on other people moving about to make a living, the pandemic has been especially difficult to weather. On top of that, some drivers use the gig as a supplemental form of income to make ends meet. Without that income, many were worried about paying bills and buying groceries.
In Pennsylvania, as in many other states, people filing for unemployment compensation struggled with busy phone lines and long wait times to receive benefits or answers about their claim. At the same time, state unemployment centers rushed to set up a new slew of federal programs to provide more benefits to people, including the Pandemic Unemployment Assistance system that extends unemployment compensation to gig workers like Uber drivers.
Now, the state says it has processed about 94% of the claims filed between March 15-June 27. The other 6% of claims require manual intervention and are under individual review, state officials say.
Overall, Pennsylvania has paid out more than $32 billion in unemployment benefits to residents since March 15, the start of business closures and stay-at-home orders in the state. Of that, $4 billion has gone to claimants through the PUA program.