The Pros and Cons of Being an Uber or Lyft Independent Contractor

Uber and Lyft have long claimed that their drivers are independent contractors, but the reality on the ground is far from that.

Are Independent Contract Statuses Supporting Your Interests?

Drivers often desire the flexibility that comes with being an independent contractor. With this status, they have the ability to work when it is convenient for them. They have full control over their schedules, the vehicles they use, and the rules they follow. This independence allows them to make money based on their personal preferences and needs. However, the current contract status often feels more like that of an employee due to the stringent rules imposed by the companies.

The Independent Contractor Experience

As a professional luxury SUV driver for four years, I understand the advantages of independent contractor status. Drivers are in control of their hours, their vehicles, and their responsibilities. There are no rigid hours to follow, and the drivers set their own schedules. Furthermore, the control over one's own schedule is a significant advantage. For those who want to balance work and personal life, the freedom to make decisions on one's available time is invaluable.

A Look Back: The Independent Contractor Era

Back in 2018, independent contractor status was relatively uncontroversial. Drivers worked when it suited them, and the system seemed to be working smoothly for both drivers and riders. However, a series of changes in early 2018 have led to significant issues. These changes have made the work environment more restrictive and have led to numerous complaints. Drivers have reported that the changes have significantly reduced their flexibility and the quality of their work-life balance. The introduction of these changes has shifted the balance towards a more employee-like arrangement, with less control for drivers.

Pros of Independent Contractor Status

One of the major benefits of being an independent contractor is the financial flexibility it provides. As the driver, you retain control over your earnings and can choose which days and times to work. This flexibility can lead to higher income during peak periods. The ability to create your own schedule is especially beneficial for those who need to balance work and personal commitments.

The Downside of Independent Contractor Status

However, the independent contractor status also comes with its fair share of challenges. Companies like Uber and Lyft are continuously making changes to their platforms that impact drivers. For example, recent updates to their apps and policies have introduced new restrictions and requirements, reducing the driver's ability to control their work. These changes often feel like a violation of the initial agreement that promised flexibility and control.

Is Employee Status Better?

Switching to employee status would involve a significant shift for both drivers and the company. As an employee, the company would need to cater to the needs of its drivers with benefits like healthcare, paid leave, and stable income. However, the flip side is that the strict rules and boundaries of an employee status might not align with the original appeal of the independent contractor model. Drivers would no longer have the flexibility to work during specific periods or to set their own schedules.

The Business Case

From a business perspective, making drivers employees would increase the company's operational costs. Implementing a compensation system, a payroll system, and handling the administrative challenges of a large staff would be a significant undertaking. Additionally, making a change like this could pose a significant risk to the company's operational structure. Drivers and riders would lose the flexibility and control that characterize the current independent contractor status, which could reduce overall satisfaction.

Conclusion

The decision to continue as an independent contractor or to seek employee status is highly dependent on individual circumstances. Drivers who handle their finances responsibly and can find ways to maximize their earnings may benefit from independent contractor status. On the other hand, drivers who prefer more structure and stability may find the employee status more appealing.

Ultimately, the choice depends on what each driver values the most. For those who prioritize flexibility and control, the independent contractor model remains the better deal. For those who are looking for a more stable, structured work environment, the transition to employee status might be worth considering. Regardless of the decision, it is essential for drivers to carefully weigh the pros and cons to ensure they make the best choice for their personal and financial well-being.