Uber Faces Obstruction From the Judicial System yet Again

It's been a while since Uber started experimenting with drones and driver-less vehicles. Despite the intuitive approach in the world of transport, the firm has faced issues of legality yet again. The New York State Department of Labor concluded officially that the Uber drivers, Levon Alesanian and Jakir Hossain are to be compensated with unemployment benefits. The company will have to pay a weekly amount of $425 for each of the drivers as an unemployment compensation.

The issue came up when the New York Taxi Workers Alliance (NYTWA) filed a complaint in favor of the two drivers for ignoring to check out the benefits linked to unemployment insurance. Alesanian and Hossain had already filed their complaint when Uber's network system had deactivated their accounts. However, no updates have been coming up regarding their applications for months. Due to the issue, the NYTWA is planning to issue complete audit of the transportation company.

 "I think this is a game-changer," said Executive Director Bhairavi Desai of the NYTWA at a press conference. "Uber has depended on the political structure turning a blind eye. What these decisions do is force a microscopic review."

This could force Uber to employ all its drivers instead of keeping some as free contractors. This will affect Uber in one way or the other. This is because employees have mandatory benefits such as insurance, salary, and other incentives. On the contrary, contractors are independent of such advantages.

As per the Internal Revenue Service, employers will need to "withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee."

A W-2 status will let employs get further benefits like admission to training facilities, overtime benefits, and reimbursements for certain expenses. In other words, this could get expensive for Uber if it sanctions W-2 forms to the IRS for the employed drivers every year.

"Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss," said an Uber official. "Drivers use Uber on their own terms; they control their use of the app along with where and when they drive.  As employees, drivers would lose the personal flexibility they value most - they would have set shifts, earn a fixed hourly wage, and be unable to use other ridesharing apps. While the Department of Labor has ruled that several drivers are independent contractors, we have appealed the other determinations."

What all is planned for the ridesharing giant is yet to be seen. Moreover, this is not the first time the company faces issues from the law.