September 4, 2015
By Steve Wishnia and Neal Tepel
A federal judge in San Francisco ruled Sept. 1 that Uber drivers qualified to proceed with a class-action suit against the company for defining them as independent contractors instead of employees. “The court concludes that a number of Uber’s class certification arguments are problematic,” Judge Edward M. Chen wrote, saying there was “simply no basis” to Uber’s claim “that some innumerable legion of drivers prefer to remain independent contractors rather than become employees.”
That status enables the company to reduce labor costs by avoiding paying drivers minimum wage or overtime and not having to pay Social Security and other payroll taxes, and it often means drivers have to pay for car maintenance themselves. Judge Chen rebuffed Uber’s arguments that it is merely a technology platform and online marketplace that allows drivers and passengers to connect with each other, ruling that those were matters for a jury to decide. Shannon Liss-Riordan, a lawyer representing the drivers, called the ruling “a major victory for Uber drivers.” The suit, filed in 2013, might set a precedent for other businesses that use a similar independent-contractor model. Read more
