FL: A More Regulative Look into TNCs

Tallahassee, FL (WorkersCompensation.com) - As sometimes happens, a new industry pops up and grows more quickly than lawmakers can regulate it. An example of such an industry is Transportation Network Companies (TNCs) such as Uber and Lyft. Started in 2009, Uber has expanded to provide service in 570 cities worldwide. Lyft, founded in 2012, operates in more than 300 cities.

These services operate through smartphone apps wherein users request a ride and a local driver is summoned to provide it. Different from a taxi service, the drivers use their own vehicles and do not work a regular schedule. The status of these drivers, whether they be considered employees or independent contractors, is important from a workers’ compensation perspective as only employees can qualify for those benefits. The issue has been litigated in California (where both Uber and Lyft are based), and the judge determined that the Uber driver’s status was a question of fact for a jury. The matter has not yet proceeded to trial.

Recently, Florida, along with other states, began to see the necessity of regulating this booming industry. Senate Bill 340 and House Bill 221 were both introduced in January of this year. The Florida House approved the bill on April 5, and the Florida Senate progressed toward reconciling its bill with the House bill on Tuesday. A detailed description of the Florida Senate’s actions can be found here. 

Both the House and Senate bill contain specific language that defines a driver’s status as an independent contractor provided that following criteria are met:

(a) The TNC does not unilaterally prescribe specific hours during which the TNC driver must be logged on to the TNC’s digital network.

(b) The TNC does not prohibit the TNC driver from using digital networks from other TNCs.

(c) The TNC does not restrict the TNC driver from engaging in any other occupation or business.

(d) The TNC and TNC driver agree in writing that the TNC driver is an independent contractor with respect to the TNC.

At face value, it would seem that these criteria could be easily met, and thus workers’ compensation benefits would not be available to drivers, and the companies would not have to maintain workers’ compensation insurance. However, a directive issued by the Department of Labor in 2015 called for a broader interpretation of employee status with any worker who is “economically dependent” on the employer being treated as an employee. 

It is important to note that a Department of Labor directive is not, itself, a law, but can be used by a court as part of the basis for a decision. However, that directive was issued under the Obama administration’s Department of Labor, which was most certainly more employee friendly than President Trump’s will be. As of now, though, the directive has not been withdrawn. 

Overall, nothing in the Florida proposals appears crippling to the new industry, and, in fact, TNCs have pushed for some statutory regulation of the industry as a quality control measure. Provided the bills define the driver’s employment status, the Florida bill, and others like it, will be unlikely to have any affect on workers’ compensation law.

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