Uber vs. Heller and the Gig Economy
"One of the significant differences here is this disruptive technology, where Uber has come in and is acting as sort of a middle person in between the drivers and individuals." - Ryan Berger
On Episode 3: Uber vs. Heller and the Gig Economy– Mark Fancourt-Smith and Alix Stoicheff speak to privacy and employment partner, Ryan Berger, about the class action case between Uber and its drivers, and how it raises new questions about the relationship between platforms like Uber and the people who provide services through them. What could this case mean for service providers like Uber and the gig economy as a whole?
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Don't have time to listen to the full podcast? Here's what this episode covered:
What is Uber vs. Heller? and what does it represent 01:13
- What are some of the issues from an employment standpoint? 03:43
- What are the potential outcomes for large and small companies? 07:02
- Where does liability fall? On the company, driver or consumer? 10:07
- What are some of the privacy issues that arise from this technology and the business model? 14:12
- What are some of the mail legal issues on the horizon for these platforms? 16:44
Transcript
Alix Stoicheff 00:00
The class action case between Uber and its drivers currently before the courts raises new questions about the nature of the relationship between platforms like Uber and the people who provide services through them. What could this case mean for platforms like Uber service providers or the gig economy as a whole?
Mark Fancourt-Smith 00:15
Welcome to Lawson Insight. I am Mark Fancourt-Smith, a litigation partner located in Lawson Lundell’s Vancouver office.
Alix Stoicheff 00:21
And I'm Alix Stoicheff, a litigation associate located in our Calgary office. Thank you for joining us on this podcast brought to you by Lawson Lundell LLP, LawsonInsight breaks down the latest legal news and updates to give you the information and tips that you need on how the law affects your business.
Mark Fancourt-Smith 00:38
On this episode, we will be speaking with Ryan Berger about the recent Supreme Court of Canada decision in Uber Technologies vs. Heller, as well as about privacy and employment issues arising in the gig economy, as the law tries to catch up with this new disruptive technology. Ryan is a partner in our Vancouver office and has experienced representing clients on employment issues, as well as privacy, including with respect to data protection, risk management, access to information and litigation. Ryan, welcome to the podcast!
Ryan Berger 01:08
Thanks, Mark. Thanks, Alix. It’s a pleasure to join you in podcast land!
Alix Stoicheff 01:13
Yeah, thank you very much for joining us. We wanted to use the recent decision in Uber vs. Heller as an entry point for a discussion around some legal issues that arise in terms of the gig economy, and specifically with respect to platforms like Uber, Lyft, or DoorDash, some of which have been getting a lot of service these days, especially due to the pandemic. And so at the outset, we wanted to ask you two questions. The first is sort of at a 20,000 foot view. Could you explain briefly what that case is about in terms of what the court actually decided? And then more broadly, what does the case represent going forward?
Ryan Berger 01:47
Great. I'll start with some background. Mr. Heller was a Toronto based Uber Eats delivery driver. And when a driver logs into Uber software application, they're presented with a standard form service agreement. It's around 14 pages, often, many of us are presented with these terms of use, but the Uber Eats is particular, as are many platforms like that, because they set up the individual as a contractor with Uber Eats. And there are various terms to that and restrictions. And to accept the services agreement and be sort of engaged in the platform, the driver has to click “I Agree” twice. And so there are a number of provisions that are being scrutinized in that case. One of them is a mandatory arbitration clause that says that any dispute arising from the agreement is to be mediated and arbitrated according to the laws of Netherlands, in under arbitral, rules in the international Chamber of Commerce, also that Uber drivers are independent contractors. And so in 2017, Mr. Heller started a class proceeding against Uber, saying that Uber drivers are actually employees, not independent contractors. And so we're covered by Employment Standards Act protections, and we can talk some more about that. But one of the big questions, I think that arises from this case, and it's a question that I think the courts have to grapple with, and we have to deal with as society as well. And those might have two different views. But that's how we should characterize the nature of the relationship that companies like Uber has with contractors.
Mark Fancourt-Smith 03:43
I just want to focus in on some of the issues in the employment context and kind of on the service provider that the contractor or employee, depending on where the core comes down on the side. It's interesting when you said users of the service, it's a bit counter intuitive sometimes because the users of the service are the ones providing services through the service as much as what we think of traditionally is the customer. So what are the some of the issues that could be decided or it could be influenced by the Uber and Heller case when it is decided on this marriage in the employment context or on the side of the of the worker? And sort of why does the case matter to them?
Ryan Berger 04:18
Right. So sort of going back to the age old distinction between an employee and a contractor. There's some sort of basics there where people often like to be called contractors and treated as contractors legally, primarily because they aren't taxed as much in Canada as a contractor as they would be as an employee. And there are other benefits like enjoying more freedom or flexibility in their work, but contractors are not afforded many of the same rights and legal protections as employees so things like benefits, overtime pay, statutory pay, severance, and terminate. Pay. And so in our employment practice, we often see fights between individuals and employers were more commonly, they'll sort of start off the relationship and say, yes, we're going to call this a contractor relationship. But when things go badly, the employee wants the rights and protections that an employee would get under the law. And so those fights go on all the time. But one of the significant differences here is this disruptive technology, where Uber has come in, and is acting as sort of a middle person in between the drivers and individuals and comes in a little bit differently than I think your your traditional middle person and says, you know, we have this wonderful technology that both you as a service provider a contractor want to use, and to be able to use that driver, you need to agree to our terms, and you need to pay us something from your earnings. And consumers, we're going to contract with you to match you with service providers, in this case, drivers or delivery folks, because this is in this case, it's Uber Eats. And we're going to charge you a fee for that as well and pass you know, a standard rates that we determine, we Uber determine on to the drivers. And so that's a bit of a different model. And I think there's an emerging economy in the development of this sort of platform. And we're seeing it in all sorts of areas from the provision of health care services, health care providers, counselors, and others being matched up with individuals through platforms.
Mark Fancourt-Smith 07:02
That's what leads into my next question, which was these companies are essentially tech companies, their tech platform companies, and you just have to look to the phrase, you know, I want to make the next Uber for something or the Uber for something else. And so looking at looking at it in the startup phase sort of brings the issues in relief in a slightly different light. So looking at it from the platform side, what could be the potential effects of this ruling? As I understand it, the court has ruled that the arbitration provision was invalid. And the matter is then proceeding, but it's nowhere near resolved on its merits of whether Mr. Heller is an employee or a contractor. But what are the potential effects both for the Goliath like the Ubers, as well as for the David's or the or the startups?
Ryan Berger 07:41
Yeah, it's a big challenge. I think for both of them, really, it leaves the law in flux right now. And there are at least a couple sort of big markets, at least, where they're serious questions about, you know, the economics of these models right now. And just to, to put it plainly if companies like Uber, or even a startup has to provide full employment benefits, and also monitor its drivers, for instance, or its other service providers, if it's a different business, to make sure for instance, they're not working overtime and accruing big overtime, payables and that sort of thing. That's a big challenge for all of them. And it's risky. Right now, in California, there's a law that's been put forward, that essentially is requiring businesses like Uber and Lyft, to treat their drivers like employees and Uber and Lyft, I understand have threatened essentially, to end their service delivery in the state of California, because it's just not economic for them to do it under that model. And so they petitioned the court, and were granted at least some temporary injunctive relief on the application of that law in California. And, you know, as we tend to see in the law and other areas, California leads in certain things like that, and it's, you know, it certainly is a leading part of the economy. So when businesses are looking to start up, they're looking at California as a leader and and what's going on there. And if you're just in Canada, and a lot of our clients who are looking to start up here in Canada, are facing some serious risks and have to contemplate whether they get into this business as a startup, you know, this scale of risk is going to be smaller than it would be for an Uber or Lyft that already employ perhaps hundreds or thousands of drivers, but, you know, on a pro rata basis for those smaller startups, the risk may be To significant for them. And, you know, we have a number of clients that are grappling with that.
Alix Stoicheff 10:07
So Ryan, I wanted to shift the focus of the discussion slightly to looking at things from the consumer perspective, when we talk about these companies that in effect are sort of matchmaking companies, they match someone who wants to reap the benefits of a service with someone who wants to provide the service. One of the key questions that arises is what if something goes wrong? While you are a consumer? Do you look to the company like Uber? Or do you look to the person providing the service? And I'm looking at it from us of consumer protection standpoint?
Ryan Berger 10:39
Yeah, I think that's a fascinating question. And another example of where the law still has to catch up to the new technology, because I think there are big questions for consumers about that. And we don't really have many cases, particularly in Canada, that that help us there, certain areas of service provision, are going to be regulated already. So you know, certain health care professions are regulated by their colleges. And so, you know, that's going to offer some protection and the providers, the platform providers that we work with in the health care space, you know, we help them navigate that instead it up because they've got to make sure that their healthcare service providers are able to comply with their obligations, you know, under legislation and professional rules and that sort of thing. And some of the transportation as an example, transportation, here in British Columbia is heavily regulated, as well. And, you know, those, those companies that are offering ride sharing services, have a long list of requirements and obligations under the transportation, or here in British Columbia, and individuals have rights of complaint through them as well. But there are going to be other areas where that's not as clear, and certainly the platform providers are going to be including language in these terms of use that exclude all liability. Those have yet to be tested, really in court in Canada, but I anticipate that there will be some consumer push, and potentially future political push to add protections for individuals that don't exist.
Mark Fancourt-Smith 12:43
One thought that comes to mind just on that is, and this is probably a question for another day. But you know, we've heard of things on social media, like the flattening of content, where, you know, different sources mediated through something like Facebook all kind of look the same and have the same indicia of reliability. From the side of these platforms, I suppose. for creative minds, is there an argument that has to the representation of reliability of their service providers, as they may be raging through the site, or at least promoted through the site by an entity that's, that is taking a fee for the connection?
Ryan Berger 13:21
Yeah, I think that's a great point. And it's going to be hit and miss there, you won't often know who the provider is that you get, you know, I know, having looked at some of the agreements, for instance, with the door dashes, and Uber Eats of the worlds and that sort of thing. Many of the, for instance, the restaurants are requiring certain standards of service, because they don't want their customers to be unhappy on the other end, because of the fault of the driver. But consumers wouldn't necessarily know that those contractual protections or standards are in place. And in a lot of cases, the parties aren't going to be able to bargain for them. So, you know, I think the market will push that to some degree, but I anticipate our society will have to weigh in, in other ways.
Mark Fancourt-Smith 14:12
One other aspect and as much on the consumer side as the tech aspects side is, what are the some of the privacy issues that arise from this technology and the business model, both in terms of, I suppose, responsibility and opportunity.
Ryan Berger 14:26
Yeah, it's fascinating and, you know, as you know, the opportunity I think we have even yet to realize a lot of these platform providers understand that they are as much or more in the business of collecting and assimilating data as they are in the provision of the service itself. And we certainly see some uses and spin off uses from traffic patterns and use for advertising. Whether that's roadside advertising or electronic advertising, here in Canada, where we have more privacy protections, and these organizations are required to act within the limits of the law a little bit more than they are in the United States, my understanding is that south of the border, there's a much wider development of profiles on individuals through all sorts of online services and companies. And I think that's a little bit scary. But it's, but there's a lot of good, I think that can be derived from the data as well. And interesting, typically, that's sort of an entry point for me, often with these tech platforms is in Canada, these are clients are looking to comply with the law when they're when they're collecting and using the information. And they want to make sure that they've informed their users appropriately and understand what the limits and what they can do with that information. So there, there's some very interesting sort of use cases with the personal information, whether that's location derived or related to their consumer habits, or their personal health information. Those all raise different privacy issues. And you know, they can be tricky, but they sure are interesting, and provide some interesting opportunities for businesses.
Alix Stoicheff 16:44
Ryan, that ties into what I wanted to ask you Next, which is I'm looking forward. What do you see as some of the main legal issues on the horizon for these online platforms? And I'm thinking of both from the perspective of the platforms, the people who provide the services, and also actually for consumers as well,
Ryan Berger 17:03
gosh, what's next? You know, I think that the platform, the technology is here to stay, people like it, consumers like it, I think, you know, in California, Uber and Lyft, say, their drivers really like it. And I certainly hear that, you know, they want to be able to pick and choose when they drive and who they drive, you know, what rights they pick up and what rights they don't and have that freedom. And I think that's proliferating into, you know, into other areas where people have more choice. And so these technologies are helping to enable it, there is money there. So, you know, there's a reason to develop. And just going back to the Uber inhaler in Canada, it's still a big question as to whether the Uber Eats drivers are going to be employees. If the court says that they are, then that will have significant financial implications in Canada for all these sorts of businesses, but I'm not so sure it will necessarily be the dagger into their hearts, entrepreneurs are savvy. And as lawyers try to be creative about how we can navigate the legalities, you know, to make sure that organizations and are protected. And individuals are also protected and have the rights that they want. I do know, you know some of our clients included who use these or have developed these technology platforms and offer them do treat their drivers, for instance, or other contractors quite well and provide them with all sorts of positive benefits and support and training. And I think that there's probably a way forward in the future. But we'll, you know, we'll figure it out. The technology is in most cases, the technology will lead and the law will scramble to catch up. And hopefully we can at least just stay a step or two ahead.
Mark Fancourt-Smith 19:12
Ryan, thanks so much for being on the podcast today. And I hope we can have you back soon not least to follow these developments as they come along. But to talk about other issues near dear to your heart.
Ryan Berger 19:22
It'd be my pleasure. Yeah. Thanks. happy to chat with you today. Yeah.
Alix Stoicheff 19:26
Thanks, Ryan.
Mark Fancourt-Smith 19:28
Thank you for joining us on Lawson insight, and thanks again to Ryan Berger for joining us today.
Alix Stoicheff 19:33
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