New Jersey is seeking around $650 million from Uber in taxes and penalties, saying the ride-hailing company misclassified its drivers as independent contractors. The decision is the latest setback for Uber and other companies in the so-called "gig economy" that rely heavily on contract labor to deliver the services at the heart of their popular apps. Worker advocates say that job classification hurts the laborers and the states where they live, which miss out on tax revenues. New Jersey’s labor department told Uber that it, along with its subsidiary Rasier, owes $523 million in overdue taxes from the last four years and is also facing fines and interest of $119 million, Bloomberg Law reports.
Uber disputed the state’s findings. "We are challenging this preliminary but incorrect determination, because drivers are independent contractors in New Jersey and elsewhere," the company said in a statement. The move was hailed as a victory by those pushing for better working conditions for Uber’s drivers, the AP reports. Many of Uber’s workers are part-time, but others work long hours and rely on ride-hailing as their sole source of income. "I have clients who are Uber drivers that are sleeping in their cars because they cannot afford the basic necessities, they can’t afford a place to live,” said Shannon Liss-Riordan, partner at Lichten & Liss-Riordan, who has represented drivers in the employment classification cases. “That's not acceptable.”
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