California Court OKs Uber Driver Class-Action Lawsuit

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More trouble is brewing for Uber in its home state of California. This week, a San Francisco federal court granted class-action status to a lawsuit filed by three drivers over labor violations.

The drivers are upset at their contract status which means they are responsible for paying for their own gas, vehicle upkeep and for anything that happens to the car or driver while they’re looking for a passenger. They think they’re misclassified and should instead be considered employees, wherein Uber would be responsible for those costs. The lawsuit also claims that the company failed to pass on tips to the workers.

Of course, Uber disagrees and says drivers are independent contractors, so the company doesn’t have to legally pay for gas and vehicle maintenance.  (Note: The class-action certification only applies to employee status and tips, not for expenses. ) In a reaction blog post on its website, Uber said it expected the potential class-action lawsuit group would include about 15,000 drivers, even though the court’s ruling could technically include 160,000 current and former drivers. It also argued that there is no typical Uber driver:

“Despite these facts, we will likely still appeal because partners use Uber on their own terms, and there really is no typical driver — the key question at issue here. When asked in a survey earlier this year, most drivers said they love being their own boss.  And it’s no wonder: Uber fits around their lives, not the other way around.  Most drivers who use the Uber app already have full-time careers or part-time jobs.  Many are students or retirees.  About half of drivers in the U.S. work less than 10 hours per week.  And, most drivers vary the number of hours they drive each week significantly.  You’re more likely to find someone who drives five hours one week, 15 hours the next, and eight hours the week after, than one who drives 10 hours week after week.”

The case could have some huge implications with how Uber does business if the drivers are victorious. Note, the suit only applies to California drivers that started driving for the company before June 2014.  Uber’s controversial albeit currently successful business model is how it’s been able to make so much money and expand so rapidly. By using contractors instead of employees, Uber reduces its bottom line substantially.

Meanwhile, this isn’t the first time Uber has been dragged to court about a worker’s status. In June, the California labor commission ruled that a single driver was an employee. Uber plans to appeal the court’s decision.

Photo Credit: Uber
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