A federal judge has ruled that all Uber drivers in California, who have not waived their rights to class action arbitration, can bring a class action suit against Uber, claiming that that Uber treats its drivers like employees without providing them employee benefits, reports WSJ. If indeed a class action lawsuit takes place, it would force Uber to pay drivers health insurance, workers’ compensation and work expenses like tolls, fuel costs and car repairs.
Uber says most drivers waived their class action suit rights
Uber will appeal the US District Judge Edward Chen’s decision to certify the class action status. The company said that the ruling only permitted a minority of its California drivers to join the class, since most drivers had waived their right to class action arbitration after Uber updated its driver contract last year. Uber drivers had also signed at least 17 different versions of a contract, each of which contained slight differences; in some of these, drivers may have waived their right to be a part of a class action suit, the report added.
What is a class action lawsuit?
The suit, which was brought on behalf of three drivers, will be now applicable in a massive class action suit. A class action suit is basically one where several people can sue on behalf of a larger group of persons, known as the “class”, where the issues in dispute are common to all members of the class and where the number of affected persons is so high that it would be impracticable to bring them all before the court.
The present ruling could mean that a high profile legal battle could take place, with possible implications for Uber’s business model, while also setting a precedent for other startups who rely on independent contractors in the services industry. A Uber spokesperson told WSJ that while they were not surprised by the court’s ruling, it was pleased that the court decided to certify ‘only a tiny fraction of the class that the plaintiffs were seeking’.
Uber says flexibility the main drive to sign up as independent contractors
In court, Uber argued that a majority of its drivers preferred the flexibility of being an independent contractor and it provided the court with 400 written declarations from drivers, who said that they preferred being independent contractors because of the flexibility. Judge Chen questioned the relevance of 400 drivers in a class which could potentially include 160,000 individuals.
Uber decides fares and termination reasons
Shannon Liss-Riordan, the attorney representing the three Uber drivers, argued that Uber controlled multiple aspects of a driver’s experience, such as setting fares to determining why and when they could be terminated, making them more like employees than independent contractors. The ruling, Liss-Riordan said, would give Uber drivers the opportunity to recover their expenses. If successful, she added, it would mean repercussions for all US Uber drivers.
California Labor Commission’s decision that Uber drivers are employees
In a separate case in a June California Labor Commission ruling, the commission had said that that drivers working for technology platforms like Uber were essentially employees of the company, and not independent contractors. It said that while platforms like Uber may “hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation. The reality, however, is that they’re involved in every aspect of the operation. They vet prospective drivers…control the tools the drivers use…monitor the drivers approval rating and and terminate their access to the application if the rating falls below a specific level.”
Uber driver charges in India
Online cab aggregators Ola and Uber started charging their drivers Rs 300 a week to try and prevent them from using other aggregating platforms from today. This charge, which applies regardless of usage, is being attributed to phone, mobile Internet connections and other services provided by the aggregators.
Uber Hyderabad drivers’ protest against incentive cuts
Late last month, Uber told MediaNama that less than 0.5% of its driver base in Hyderabad ‘expressed some concerns regarding temporary incentives’, after Uber’s driver base in Hyderabad accused the company of being dishonorable with regards to its incentive promises. Allegedly, the per ride incentive had been reduced from Rs 225 to Rs 150 in Hyderabad. A Uber driver also said that Uber had been charging Rs 300 as device charges per week, which were deducted from the driver’s account, whether or not they logged in to the service. This was other than the 20% commission the company charged per ride.
Our Uber coverage here.