If cases like Liss-Riordan’s are successful, on-demand
companies would have to pay overtime, deductions from
wages, and, in California, the expenses incurred by their
service providers. Those costs would mount into the
millions, and proponents of the on-demand economy worry
that they could force successful companies out of business.
Surely taxes and expenses still have to be paid, and the "independent contractors" set their prices accordingly?
I mean, either Uber pays an independent contractor $10, they pay $2 in tax and $3 in expenses and end up with $5 in their pocket; or Uber pays out $2 for tax, $3 for expenses, and pays the employee $5. In both cases, Uber pays $10 total and the driver takes home $5.
I assume Uber's business model doesn't rely on contractors tax-dodging or skimping on vehicle maintenance!
So why should they worry about the reclassification putting them out of business?
I mean, either Uber pays an independent contractor $10, they pay $2 in tax and $3 in expenses and end up with $5 in their pocket; or Uber pays out $2 for tax, $3 for expenses, and pays the employee $5. In both cases, Uber pays $10 total and the driver takes home $5.
I assume Uber's business model doesn't rely on contractors tax-dodging or skimping on vehicle maintenance!
So why should they worry about the reclassification putting them out of business?