JURIDICON lawyer’s comments for “Verslo žinios” article: Uber Would Hardly Escape the Labor Relations in Lithuania

2015-09-01 12:45
Tax news

Law Firm JURIDICON attorney at law Laimonas Marcinkevičius discuss differences between labor relations and independent activities in the context of Uber taxi drivers’ case in new article of “Verslo žinios”: “Vargu ar Uber Lietuvoje išvengs darbo santykių” (‘Uber Would Hardly Escape the Labor Relations in Lithuania’).

Laimonas Marcinkevičius, attorney at law of Law Firm Marcinkevičius ir partneriai Juridicon, notes that 2 of 10 employees in United States are incorrectly classified as independent contractors. In such case, employer would not have to pay compensations, social insurance taxes, income tax and on the whole he suffers 20 percent lower costs. Statistics are showing that in US where Uber business are widely developed, the government budget lost around USD 3,2 milliard of income tax. Business which avoids labor relations usually suffers much more lower costs both in Lithuania and in foreign countries.

Uber taxi passengers order the transport service by using app in their phones, while taxi drivers works in accordance with the License Agreements and driving passengers by their own cars, not Uber company cars. Taxi drivers in these License Agreements are called as ‘independent contractors’.

‘The main feature of labor relations is right to control. If company hires independent contractor, he should carry just final result of his work, but not its process, measures or methods’- says Mr. Marcinkevičius. He adds that Uber also tries to control not only the result but the process of transport services too. Uber provides requirements how taxi drivers should clean their cars, what they can say to their passengers and what they can not say. On the other hand, Uber does not control when drivers should work and the territory where certain driver could work. Also, drivers can choose what passengers they can pick up. Mr. Marcinkevičius concludes that Uber uses full control to drivers, because just company itself can decide the price of transport services. Although Uber does not provide workplace and measures for work activities, however, it gives list of very specific requirements how exactly drivers should provide taxi services.

Read the full article in newspaper „Verslo žinios“ (1 September 2015, No. 115 (4388), p.15). Article can be found in website too.[1]

You can read article about status of Uber driver’s here.

[1]Žeimantas, V.V. Vargu ar Uber Lietuvoje išvengtų darbo santykių. 2015-09-01, Verslo Žinios.