Opinion ID: 4551120
Heading Depth: 2
Heading Rank: 2

Heading: Independence Factor

Text: Given the evidence of record, we find that Lowman’s activities met the “customarily engaged” aspect of the independence factor. We thus focus on whether his activities constituted an “independently established” business. [J-73-2019] - 46 Although the control and independence factors in Section 753(l)(2)(B) are articulated as separate considerations, it is apparent that certain indicia considered in the context of the control factor are also relevant in the analysis of the “independently established” aspect of the independence factor. For example, Lowman’s inability to share his access to the Uber App with anyone else, Agreement, ¶¶ 1.7, 2.2, prevents Lowman from hiring someone else to provide services to a passenger made available to him by Uber. This is an indication of Uber’s control over the manner in which services are provided because the services must be personally performed by Lowman. This contractual prohibition, likewise, divests Lowman of the ability to subcontract business. The ability to hire other drivers to take their riders is a recognized indication of one who is independently engaged in a business. Danielle Viktor, 892 A.2d at 785-86. Lowman’s relationship with Uber, which prohibits subcontracting, strongly militates against a finding that he is independently engaged in a business. When Lowman is providing a ride to a passenger, he must display the Uber decal. The fact that this is mandated by statute and not by Uber is inconsequential. It is evidence of the more fundamental fact that Lowman cannot provide driving services independent of Uber since Pennsylvania law prohibits individuals from providing commercial driving services in personal unlicensed vehicles. 53 P.S. § 5714(f). Further, Lowman could not build his own client base under the auspices of his Uber relationship because his contract limits his communications with customers to the Uber App and are permitted only for the purpose of providing rides through Uber. Agreement, ¶ 2.2. Even with the Driver App activated, whether or not Lowman would have the opportunity to provide a ride service was determined by Uber which, by way of its algorithm, determines which available driver [J-73-2019] - 47 will be offered an assignment. Id. An Uber customer could not seek out Lowman’s services. Thus, Lowman’s ability to develop a separate relationship with clients was not existent. This arrangement is in stark contrast to the luxury limousine drivers in Danielle Viktor who had their own customers, advertised their services and arranged the trips they provided. Lowman had no ability to set his compensation for providing a ride service. Although under the Agreement, he could negotiate a lower fare than set by Uber, Uber remained entitled to its fee that was set at the higher rate. Agreement, ¶ 4.1. Since the transfer of funds was between the customer and Uber, it is also unclear from the Agreement how the lower rate would be effectuated since the “payment processing functionality” controlled by Uber still must be used. Id. Lowman could not negotiate a higher rate with a passenger. Lowman’s inability to set or negotiate his remuneration weighs against a finding of an independently established business. A countervailing aspect of Lowman’s relationship with Uber is that he had the ability to decide whether and when he would activate the Driver App and thus, be available for driving assignments. Moreover, pursuant to the Agreement, Lowman had the right to refuse an assignment of a passenger when the Driver App was activated. Agreement, ¶ 2.4; N.T. (Referee Hearing), 10/29/2015, at 8, 10, 26, 36; Board Decision, 4/22/2016, ¶ 7. Although relevant and somewhat weighty, we do not find these facts to be conclusive as to the determination that his activities amounted to an independently established business. Certainly, this type of discretion on the part of an individual in the traditional workforce is unusual. As we noted in Danielle Viktor, it is generally an independent [J-73-2019] - 48 business person who has this type of unmitigated prerogative. Danielle Viktor, 892 A.2d at 797. However, the world in which Uber and Lowman operate is not the usual workforce. Traditionally, hours of work are set and required by an employer (or putative employer) because the operations of the enterprise are dependent on a set number of workers to accomplish a defined task. In contrast here, the fact that Uber allows all of its licensed drivers to work at their own discretion31 evidences a decision that there are a sufficient number of individuals with access to the Driver App to ensure that, despite erratic schedules, there will always be a driver available to service passengers requesting Uber’s service. The fact that Uber’s business model does not require regularly scheduled work hours from its workforce does not translate into an automatic independent contractor relationship. Moreover, while Lowman could refuse assignments while logged in, the evidence of record does not allow a conclusion as to the repercussions for such refusal. The Agreement contains Lowman’s acknowledgment that failure to accept Uber requests creates a negative experience for Uber customers. Agreement, ¶ 2.5.2. The Agreement also gives Uber the right to terminate Lowman’s access to the Uber App if Uber decided that Lowman caused harm to Uber through his acts or omissions. Agreement, ¶ 2.4. On this record, we cannot conclude that the right to refuse assignments is not illusory. Thus, 31 This is true only to a point. Lowman had to use the Driver App at least once a month, otherwise, Uber could deactivate the Drive App. Agreement, ¶ 2.1. [J-73-2019] - 49 despite some arguable indicia to the contrary, we conclude that Lowman was not engaged in an independently established business.32 C. Calculating Lowman’s Unemployment Benefits After reversing the Board’s decision, the Commonwealth Court remanded “for further proceedings before the Referee to calculate the unemployment benefits owed to [Lowman], taking into account any offset for his earnings from Uber.” Lowman, 178 A.3d at 903. The Commonwealth Court explained its instruction in a footnote: The Board found Claimant “earned” approximately $350 per week, but the record shows only what he was paid. To know what he “earned” would require information about his expenses, which is not of record. Section 404(d)(1) of the Law authorizes a reduction to an employee's “weekly benefit rate” that exceeds his “partial benefit credit.” 43 P.S. § 804(d)(1). Lowman, 178 A.3d at 903 n.10. The Commonwealth Court’s undeveloped rationale can be largely explained by the fact that this aspect of its decision was not briefed by any party before it. The Department 32 Like the Dissent’s isolated and selective analysis of the control factors, Dissenting Op. at 2–4, in its critique of our analysis of the independently established business criteria, the Dissent again fails to embrace the notion that we must consider the totality of the circumstances, including the contractual agreement and the dynamic of the industry and the workforce in which Uber and Lowman operate. Id. at 4. As discussed, Lowman had no ability to set the rate for the services he provided; had no ability to develop a client relationship with the passengers he serviced using the Uber App; and pursuant to the Uber Agreement, he could not subcontract his work and he could not provide driver-forhire services unless Uber, by way of an algorithm, offered him an assignment. While we recognize the countervailing aspects of the relationship with Uber, in light of the totality of the circumstances, Lowman was not engaged in an independently established business. While the Board reached a contrary legal conclusion, we are in no way bound by it. The Dissent’s contention that results may vary depending upon the ”non-Uber activities” of different drivers does not constitute a criticism of the analysis set forth herein, but rather merely a recognition that individual decisions must be made in specific cases based upon the unique facts presented in each circumstance. See, e.g., Danielle Viktor, 892 A.2d at 791; Universal Am–Can, Ltd., 762 A.2d at 330–31. [J-73-2019] - 50 as the Appellee before the Commonwealth Court did not file a brief, instead relying on the brief of Uber in support of the decision of the Board and the Referee. The issue of the calculation of the offset was not an issue since all previous decisions found that Lowman was self-employed and thus, not eligible for benefits. The Board now contends that the Commonwealth Court’s directive is contrary to the Act. The Board directs us to section 804(d)(1) of the Act, which governs deductions from weekly benefit payments. This section provides, in relevant part, as follows: § 804. Rate and amount of compensation