The Oregon Supreme Court ruled last week that a Portland taxicab company mustpay unemployment insurance taxes for certain drivers because theywere improperly classified as independent contractors, theAssociated Press reported.

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The case comes as more attention is being paid to the employmentstatus of for-hire drivers. Companies face higher costs foremployees than they do for independent contractors, such as payrolltaxes, unemployment insurance and workers’ compensation.

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In a statement, Broadway Cab president Raye Miles said she isdisappointed in the court’s ruling and believes the company isoperating in compliance with Oregon law.

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Over the past year, Broadway and other Portland cab companieshave faced an intense shakeup in the transportation market asride-hailing apps like Uber and Lyft have moved into the market,the AP said.

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“Broadway Cab is experiencing an exciting time oftransformation,” Miles said. “The court decisions add to thecomplexity of what we face in the marketplace, yet provide us withchallenges we embrace.”

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Uber drivers should be held to the same standard, she said.

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Background

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The case stems from a tax bill issued by the state EmploymentDepartment for unemployment insurance in 2008 and 2009. Broadwaycontested the bill, saying its exempt from the tax because driversare independent contractors.

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Broadway Cab argues that drivers work for riders, not for thetaxi company. The company provides dispatch, marketing, credit cardprocessing and other services for drivers, who pay a weekly fee toaccess them. Some own their own vehicles; others rent from the taxicompany or from other drivers, the AP said.

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But an administrative law judge who reviewed the matter ruledthat the cab drivers don’t qualify as independent contractorsbecause they don’t have an independent place of business, work formultiple companies or have authority to hire and fire people tohelp them provide services. The Court of Appeals upheld thatruling, and the Supreme Court agreed.

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