The Superior Court also found drivers to be "an integral part of [Yellow Cab's] business," further solidifying cab drivers' status as employees.
Yellow Cab driver John Han explained that the prepayment fee is based on the number of shifts a driver works. He offered himself as an example: Han works eight shifts per month. Multiplied by the average daily gate fee of $96.50, Han's prepayment equals $772. Since Han said that cab drivers make between $100<\d>$150 per day, most of his earnings are eaten up by the end of his shift or before the shift even begins.
To coax its drivers into compliance, Yellow Cab posted a sign in its San Francisco office that reads, "Do not delay in completing your prepayment or you will be subject to being held out of service." Han says that being held out is equivalent to being a benched baseball player who is technically still on the team.
"We won't be fired, but we will be prevented from being able to work," Han said, noting that such threats constitute the exercise of control over the drivers by Yellow Cab. "Forcing drivers to do anything is having control over its workers, which is a employer-employee relationship."
EDD spokesperson John Stroot told the Guardian that the information sheet Yellow Cab uses to justify this policy does not compel companies to do anything new. What it does contain are guidelines for different taxicab business models: one for companies that have employees and another for companies that use independent contractors.
"These are not laws," Stroot said. "Cab companies can operate any way they choose. They are just guidelines for companies to follow to figure wage, hour, and tax issues." If Yellow Cab wanted to make drivers independent contractors, it would have to fulfill all requirements on the sheet, not just the one specifying prepayment. For example, drivers would be required to perform their business without any form of control from Yellow Cab, including foregoing the use of Yellow Cab's dispatch services. But Stroot said most drivers are employees under common law in California "because the company directs and controls the way drivers provide their services."
Misclassifying employees as independent contractors has become a national issue, particularly after Rep. Lynn Woolsey (D-Marin County) and Rep. Rob Andrews (D-N.J.) introduced a bill intended to crack down on the practice. If passed, the bill would impose penalties on employers who misclassify employees and inform workers of their right to challenge that classification. The bill also would require state unemployment insurance agencies to conduct audits to identify employers guilty of employee misclassification. In addition, the Department of Labor would be required to perform targeted audits of employers in some industries.
The UTW is currently working with Thigpen and Sup. Chris Daly's office to achieve some form of justice for drivers. "My office is very concerned by this policy," Thigpen said. "It couldn't have happened at a worse time for drivers. These guys are good people, and they work hard every day." Thigpen said Taxi Commission member Tom Oneto asked her to draft new rules that would apply to such policies. Other than imposing fines and revoking permits, however, there is little her office can do.
"We need serious overhaul of our penalties," Thigpen said. "Right now I can only charge them $25 in fines, which is pathetic. They know they are breaking the law and ripping people off. But how do you begin?" she asked. "We need to get legislation passed that would overhaul the rules." The strongest weapon city officials have against Yellow Cab is to seek an injunction.
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