Uber’s Bike Courier Service Undermines Bike Messengers
March 30, 2016 | Workers Compensation
Uber is creating controversy on the streets of New York, and not because of the conflict between taxi drivers and unlicensed Uber contractors, according to an article by Crain’s New York Business. Instead, the issue is between bike messengers working as couriers and Uber’s new delivery service, which is similar to its driving services in that it employes unlicensed individual contractors. UberRush is a courier-service app for individual consumers and businesses that pays around 80% of the commission to the bike contractor.
High Cost of Workers’ Compensation Leads to UberRush Rise
Uber cyclists do not receive safety training and few wear helmet, though trend follows other bike courier services as well. Additionally, Uber delivery cyclists do not receive any insurance because they are only on contract, meaning they are on their own to pay for medical expenses in case of a bicycle accident that they are at fault for, it is a hit and run and they cannot track down the negligent driver, or they are unable to prove that it was the driver’s fault. Many couriers and UberRush couriers do not have personal health insurance or even auto insurance, such as David Santos, a cyclist that delivers for a traditional bike courier as well as Uber. When asked about the dangers and his lack of insurance he says, “I try not to think about that. I ride safe. I take care of myself.” Drivers face little punishment even when found to be at fault for causing serious injury or even killing cyclists, as reported by the New York Daily News.
High Cost of Workers’ Compensation
The reason for the boom in business for Uber is because many businesses can no longer afford to hire bike couriers due to the increasing costs of workers’ compensation. Since 2008, the cost of workers’ compensation premiums have quadrupled from roughly $30 to $40 for every $100 in payroll. Compare that to a foot deliver person, albeit much slower, at 50 cents per $100, and it becomes obvious why the decline in established courier businesses is occurring, the increasing prevalence of foot delivery personnel, and the rise of UberRush
Uber is Accused of Openly Breaching the Law
Traditional courier companies and deliverers have accused Uber of violating the law by hiring independent contractors that do not require insurance compensation because the law sees them as being in business for themselves. Therefore, they are not covered by state nor federal labor laws. This makes traditional courier companies noncompetitive because they are required by law to hire cyclists as employees and therefore pay workers’ compensation and other high fees. Additionally, Uber bypasses any minimum wage standard by doing this, which may not affect bike couriers because they can make deliveries faster, but cuts into the profits earned by foot couriers. Because Uber does not have to pay workers’ compensation or a minimum wage, they can drastically decrease the price for their customers, which is undercutting other, possibly more legitimate, courier services.
Robert Kotch owns Breakaway Courier Systems, which has been around for 28 years and has 300 employees. He says, “They are hiring foot and bike messengers as independent contractors, not employees, and the New York State Department of Labor has forbidden this practice for years.” Being a bike courier is dangerous no matter what. Being a bike courier for Uber opens up the possibility of serious financial damage as well for cyclists that are hit on the job. If you have been involved in a bicycle accident of any kind, contact an experienced bicycle accident attorney today with the law offices of of Napoli Shkolnik PLLC at 212-397-1000.
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