The Uber Misclassified Employee Lawsuit Is Now A California Class Action

While class action lawsuits can be an effective consumer remedy, they are not a quick one. Former drivers for ride-hailing service Uber first filed a class action on behalf of all California drivers in 2013, and it has just now been certified as a class action. The original lawsuit alleges that drivers for Uber are misclassified employees, who should have their vehicle expenses covered by their “employer,” Uber.

Such lawsuits have online startups that depend on the labor of local independent contractors frightened: their business models count on armies of independent contractors. Some companies, notably the delivery service Instacart, have brought part of their workforce on board as employees. Instacart hired only its order-pickers, who only work part-time hours to avoid the requirement to provide health insurance, and notably did not hire delivery drivers, leaving them as independent contractors responsible for their own vehicle costs.

The judge’s ruling [PDF] in this case certifies the lawsuit as a class action where all current and former Uber drivers in California are theoretically plaintiffs. Hundreds of Uber drivers filed declarations with the court explaining that they prefer to stay as independent contractors, appreciating the freedom to make their own hours and to go off-duty by simply turning off the app.

The judge didn’t find this convincing, pointing out that Uber never claimed that the drivers who gave declarations were a random sample of all drivers: for all the court knew, Uber only solicited statements from drivers who are already vocal about wanting to stay as independent contractors. “Nothing suggests, for instance, that [the drivers] were told that were the Plaintiffs to prevail, they might be entitled to thousands of dollars,” the judge wrote. Without giving drivers that information first, it’s impossible to know.

Six out of the hundreds of drivers quoted in the document later said that they didn’t understand the practical differences between being a contractor and being an employee, and they submitted updated statements to the court saying that Uber misled them about the benefits that employees receive, such as having their employer pay part of their Social Security taxes, and having vehicle costs reimbursed. The plaintiffs’ attorneys helped clear things up for these drivers, and said that even more would have come forward, but they didn’t want to risk having their accounts deactivated for speaking out against Uber.

The class action represents as many as 160,000 current and former Uber drivers in California, and seeks back wages and expenses. The jury trial will happen sometime in 2016.

Uber’s Worker Classification Lawsuit Will Stay a Class Action [Re/Code]
Uber gets dealt another blow in California suit [CNN]

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  1. Xenotaku says:

    There’s also stuff in Seattle going on, where Uber drivers are trying to get a union:

    All of this is why I’ve been against these companies from the start (pending proper legislation to regulate them, of course). The companies claim that they’re just a service to connect people, and that the drivers are just “contractors.” But there’s nothing to separate an employee from a contractor, in these cases. And if they’re not employees, why is the “format” disallowing them to get tips, or taking portions of the tips (as per the Stranger article). And the drivers are basically just freelance taxi drivers, yet don’t require the same regulations as taxi drivers.

    IMO, there needs to be a compromise.
    –To preserve the current system, let the drivers be commission-based employees. Uber doesn’t have to pay them wages, their commission is the fares, but Uber WOULD have to classify them as employees.

    –New legislation would have to be written up, but I feel it would be fair for Uber to pay the SS tax, and take out any Federal and/or State income tax, but not have to provide for upkeep of the vehicles.

    –Regarding tips, Uber shouldn’t be allowed to make a say at all on if the Driver can or can’t accept tips.

    –One of the Taxi companies’ complains is number of drivers (as they are limited as well). Uber should be regulated as well. If a certain number of drivers are active (as in, have the app activated and are accepting clients), then it should not allow any other drivers to become active (give the app an alert “there are now open slots in your area” or something).

    –Drivers should be required to have the same commercial license and/or insurance that a taxi driver has. You’re providing the same service, why shouldn’t you have to have the same license and/or insurance?