Date
20 September 2017
A victory for the drivers threatens to upend Uber's business model and cut into its more than US$60 billion valuation. Photo: Bloomberg
A victory for the drivers threatens to upend Uber's business model and cut into its more than US$60 billion valuation. Photo: Bloomberg

Uber drivers’ lawsuit over pay just got much costlier

Drivers seeking to be treated as employees of Uber Technologies Inc. won a ruling that adds tens of thousands of them to the case and may put hundreds of millions of dollars more at stake.

A judge’s decision on Wednesday that is likely to allow the vast majority of Uber’s 160,000 drivers in California join a class-action suit against the ride sharing operator expands the company’s liability exponentially, Bloomberg said, citing legal experts.

A victory for the drivers threatens to upend Uber’s business model and cut into its more than US$60 billion valuation, the report said.

The drivers can now seek expense reimbursement, including as much as 57 1/2 US cents for every mile driven, in addition to their claims for tips that are already part of the case, according to a ruling by US District Judge Edward Chen in San Francisco.

“A lot rides on this case,” said Catherine Fisk, a law professor at the University of California at Irvine.

“Uber’s business model rests on outsourcing to its employees the fixed costs of running a huge fleet of cars for hire.”

While reimbursing any individual driver for her expenses is small, “in the aggregate it appears to be a substantial amount of money”, she said.

Uber said it will appeal the ruling immediately.

“Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss,” the company said in a statement.

“As employees, drivers would lose the personal flexibility they value most — they would have set shifts, earn a fixed hourly wage, and be unable to use other ride-sharing apps.”

When the judge allowed the drivers in September to press their claims as a group, seeking tips allegedly denied them as independent contractors, he limited the size of the class to what Uber said is less than 10 percent of its California drivers.

Chen’s re-examination of Uber’s 2014 contracts with drivers that required them to resolve disputes through arbitration will probably add tens of thousands of drivers who were excluded from the case in his September ruling.

The company has said most of its drivers were hired in the last two years.

– Contact us at [email protected]

RA/CG

EJI Weekly Newsletter

Please click here to unsubscribe