Hillary Clinton takes aim at Uber during speech on 'gig economy'

The democratic presidential candidate vows to "crack down" on companies that misclassify employees as independent contractors.

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Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
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Hillary Clinton isn't a fan of companies like Uber. James Martin/CNET

The topic of job creation has long been a staple of US presidential elections, but some jobs born out of today's on-demand economy have raised the concern of at least one candidate.

In comments aimed squarely at companies like Uber, Hillary Clinton, a candidate for the Democratic party's nomination, said Monday that she would "crack down on bosses who exploit employees by misclassifying them as contractors or even steal their wages." While she didn't call out Uber by name, the ride-hailing giant has come under scrutiny for its practice of classifying drivers as independent contractors rather than employees.

"Many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car," Clinton said during a speech at the New School in New York City. "This on-demand, or so-called 'gig economy,' is creating exciting opportunities and unleashing innovation. But it's also raising hard questions about workplace protections and what a good job will look like in the future."

"Fair pay and fair scheduling, paid family leave and earned sick days, child care are essential to our competitiveness and growth," the former secretary of state said, referring to benefits not accorded to independent contractors such as drivers at Uber.

Uber's current classification of drivers as contractors means the company is not responsible for all sorts of costs, including Social Security, health insurance, paid sick days, gas, car maintenance and much more. If all drivers were classified as employees, Uber would have to pay for all of this, as well as manage a workforce of more than one million.

Uber, which provides a mobile app that lets passengers hail a ride from their smartphone, began operations in 2009 and is now the world's largest ride-hailing service, operating in more than 250 cities in 57 countries. It is also the second-highest-valued venture-backed company in the world with a valuation of $41.2 billion.

But legal tensions over how the San Francisco-based company classifies its drivers have increased in recent months. In March, the California Labor Commission ruled that a former Uber driver was an employee and not a contractor and ordered Uber to pay more than $4,000 in expenses and other costs for the time period she drove for ride-hailing company.

The ride-hailing company is being sued by three former drivers who claim they should've been classified as employees rather than independent contractors. The drivers are seeking class action status for the suit on behalf of 160,000 drivers who have worked for Uber.

In a motion filed last week opposing class action status, Uber argued that it's created several different service agreements and contracts for drivers, therefore it's difficult to lump all drivers into the same class. The company also included statements from 400 drivers that say they'd prefer to be classified as contractors, rather than employees.

The company has also argued that another reason why drivers should be classified as contractors is because they have flexible schedules and can drive as much or as little as they want.

Uber did not reply to a request for comment on Clinton's comments.