When former GrubHub delivery driver, Reaf Lawson, filed his lawsuit of $586.56 against them in San Francisco, he most probably never imagined the potential outcome of his case could see the beginning of the end for the so called "Gig Economy"
Lawson's lawyer, Shannon Liss-Riodan, is challenging GrubHub & Uber over whether 1099 contractors should really be counted as employees rather than independent contractors.
'1099 contractors' can be their own bosses, allowing them to work their own chosen hours, and also gives them the freedom to work other jobs if desired. Some would say that's not such a bad thing -- but what this does mean is the employers who bring on these 1099 contractors avoid paying taxes, overtime pay, benefits and compensation.
Lawson's lawyer is trying to prove that the employment undertaken by Reaf meets the conditions of what's called the Borello test, which looks at working conditions to determine whether the work performed is part of the company's regular business, the skill required, payment method and if the work is supervised by management. The simple maths is; to decide whether someone is a contractor or an employee.
As reported by Tyler Durden in ZeroHedge the entire business model of companies like Uber and GrubHub, hangs in the balance. Having to pay out on all employees rights would likely force them to either cease trading, or more likely, begin to charge its customers the full going rate of their service, which certainly, in relation to Uber, would probably see their prices match or even exceed traditional Taxi fares.
The case continues, with an outcome possibly within the next few weeks.