Uber Moves To Block Class Action Status For California Lawsuit

Date: July 10, 2015

Rideshare Service Submits Testimony From State Drivers In Worker Classification Case

Ridesharing has proven controversial across the US, particularly in California, where a recent court ruling found that Uber drivers were employees, not contractors. Uber’s efforts to block a class action suit in the state from a plaintiff seeking that drivers be classified as employees, not independent contractors, has been garnering significant coverage from traditional and tech media outlets, including commentary on the ongoing debate about how judges and policy makers should address issues created by the emerging sharing economy related to antiquated labor laws. The Wall Street Journal reports in its “Digits” blog that Uber on Thursday submitted testimonies from 400 California driver partners, in which they asserted their preference for being classified as independent contractors because they want the flexibility such classification affords them. WSJ notes that Uber is arguing that the case doesn’t merit class action status because the plaintiff doesn’t represent the drivers that value their independent contractor status. TechCrunch reports that the brief, filed Thursday, opposes granting the suit class action status, claiming that it “does not reflect the desires of most of its drivers to remain independent.” The New York Times reports that labor lawyers dispute Uber’s argument, asserting that “the heart of the class-action certification case” should consider “how much uniformity there was in Uber’s treatment of its drivers when they were working for the company” rather than “how much uniformity there was among the drivers themselves.” Business Insider reports that Uber describes itself as a “lead generation” app connecting “people who want rides” with “drivers who sell them,” according to testimony by Professor Justin McRary, “an expert hired by Uber,” that the company submitted to the court Thursday.

What Happens Next

The outcome of the suit is uncertain. The Los Angeles Times notes that if Uber is successful, the class action suit may turn into “a run-of-the-mill lawsuit with only three plaintiffs.” Ultimately, the Times says Uber “will do what it can to avoid” class-action status, because a loss in a class action suit “can be a lot more expensive than losing a suit against individuals.”

What This Means For Small Businesses

Many small business owners rely on independent contractors to help grow their business. Uber’s challenges in employee classification are troubling to small businesses across California, who may similarly find themselves under increased pressure to classify workers as employees, and thus provide benefits like paid leave and unemployment insurance.

Additional Reading

The San Francisco Chronicle, Bloomberg News, The Hill, Reuters, and the Washington Post are among the other outlets covering Uber’s battle in the California suit. In an article for New York Magazine Annie Lowrey asserts that the sharing economy necessitates an adjustment to US labor law. NFIB previously covered Uber’s struggles in California.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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