Monday, 08 August 2016 00:00 By Dean Baker, Truthout | Op-Ed
Uber, along with Lyft, stopped operating in Austin in early May after the city's voters endorsed a requirement that drivers for these services had to be fingerprinted and undergo background checks. The companies complained that the requirement placed an onerous burden on them and instead said that they would just stop operating in the city.
As a practical matter, the real issue almost certainly was not the difficulty of fingerprinting. After all, taxi companies across the country have complied with similar requirements for decades and it is unlikely that the management of these old-styled cab companies are much more competent than Uber's management.
Rather, the issue was likely that Uber is worried about its drivers being labeled as employees. Uber claims that its drivers are independent contractors, not employees. As independent contractors, Uber is not responsible for paying Social Security taxes, nor is it liable for workers' compensation for drivers who get hurt in traffic accidents. It also doesn't have to withhold income taxes. And, independent contractors don't have the right to unionize.