Taxi drivers were employees; cab company owes UI taxes

Taxicab drivers performing services for a cab company for remuneration were not independent contractors under state law, the Oregon Supreme Court concluded, agreeing with a court of appeals that the cab company was liable for unemployment insurance taxes on the drivers’ wages.

Payment from passengers. The court noted that state law did not require that the employer pay its employees directly for services provided. The fact that the drivers in this case received fares from their passengers did not mean that the drivers did not provide services for the cab company or receive remuneration for those services, and the court found no error in the conclusion that the cab company “employed” the drivers.

Independent contractor exclusion. It was the company’s burden to establish that its drivers met the requirements of each of the four listed criteria in the statute; failure to meet any one of the requirements would defeat independent contractor status. The High Court first focused on whether the uncontested facts demonstrated that the drivers maintained business locations separate from the company and whether they had the authority to hire and fire other individuals to assist in providing the services. The court rejected the company’s contention that the statutory requirement was met because a taxicab operator’s work “location” is his or her vehicle. The court concluded that vehicles were not “separate from the business or work location” of the company. In addition, the company’s business was not limited to providing administrative services at a specific location; under its permit, it had to provide taxicab services 24/7 throughout the City of Portland. Thus, the business was located not only at its administrative offices, but also in the field where its taxicabs were operating.

Driver agreements. The driver agreements precluded persons other than approved drivers from driving vehicles on the company’s approved vehicle list. The company did not claim that its drivers had authority to hire individuals to provide or assist in providing driving services, nor did it argue that the drivers’ authority to hire other professionals (mechanics, accountants, etc.) provided the necessary authority. Only the company could decide who could drive the taxicabs on its approved vehicle list, which meant it could not establish the independent contractor exclusion (Broadway Cab LLC, Ore. Ct. of App., Ore. ¶8959.)

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