Uber Class Action Lawsuit May Affect Whole Sharing Economy

As the ride-sharing company Uber faces an increasingly powerful California class action lawsuit, the fate of the rest of the sharing economy may be determined by the outcome.

Plaintiffs in the Uber driver class action lawsuit are seeking compensation for back expenses. Earlier this month a federal judge granted class status for a proposed plaintiff class consisting of California Uber drivers who drove for the company since August 16, 2009 and who meet certain other specific criteria.

Plaintiffs had originally estimated their proposed class to include about 160,000 members, but in a statement following the court’s order Uber estimated the class size at fewer than 15,000 eligible plaintiffs. The company also says it will likely appeal the class certification.

Uber runs a mobile application that connects people who need a ride with drivers willing to drive them. By one estimate, the company was recently valued at $50 billion. Uber maintains that it is not a ride service provider but merely a technology company that facilitates connections between drivers and riders.

Uber says its drivers appreciate the autonomy that comes with being classified as a contractor.

Are Uber Drivers Independent Contractors?

At the core of the Uber class action lawsuit is the question of whether Uber’s drivers are employees or contractors. If they qualify as “employees” in the legal sense, they could be entitled to a world of legal protection that would not apply if they were merely contractors.

A central determinant of whether a person is an employee or a contractor is how and how much, the company exercises control over that person’s work. Uber says the traditional employer-employee relationship does not apply because its drivers are free to decide when and how often they work.

Uber has already lost the employee misclassification argument at least once before an administrative tribunal. In June 2015, the California Labor Commission ruled that one Uber driver from San Francisco was indeed an employee.

Contrary to Uber’s argument that it leaves the drivers in control, the commission found Uber is involved in every aspect of its operation. The commission awarded the Uber driver over $4,000 in back expenses to cover costs like mileage reimbursement, tolls and interest.

The state commission’s decision in the case of a single California Uber driver does not resolve the same question for purposes of the federal Uber class action lawsuit, however. The federal plaintiffs still have to establish that they are employees.

An attorney for the federal plaintiffs says that Uber improperly leaves much of the cost of doing business in its drivers’ hands. California employment law requires employers to reimburse employees for their expenses, the attorney says.

According to the LA Times, if Uber’s California drivers were classified as employees, Uber would be legally obligated to pay them for gas, tolls and insurance and would also be obligated to provide other benefits like unemployment insurance and worker’s compensation.

Some legal experts expect that the results of this Uber class action lawsuit could have ramifications for the rest of the sharing economy. Other sites like Airbnb and Uber’s competitor Lyft might have to face similar legal issues.

An attorney for the plaintiffs says the case will not likely go to trial before sometime next year.

If you were misclassified as an independent contractor while working as a driver for Uber in California, you may have a legal claim. Filing a successful individual Uber lawsuit could help you recover unpaid wages, expense reimbursement and other benefits owed to employees under California labor law.

The Uber class action lawsuit is Case No. 3:13-CV-03826 in the U.S. District Court for the Northern District of California.

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