Sharing economy businesses may have to start sharing more wealth with their on-demand labor force. A federal judge agreed Tuesday to grant Uber’s 160,000 California drivers class action status to jointly pursue their claims that they are Uber employees and not independent contractors as Uber contends.
U.S. District Judge Edward Chen ruled the drivers situations were similar enough for a jury to decide as a class what their true work classification should be.
“Despite Uber’s argument to the contrary, there are numerous legally significant questions in this litigation that will have answers common to each class member that are apt to drive the resolution of the litigation, Chen said in a 68-page ruling.
While he did grant class status to drivers who signed up in 2009 or later, he denied class status for drivers who signed up in the summer of 2014 or later, when Uber says it included an arbitration clause in its contracts which prohibits class litigation.
Uber says that portion of the decision will curtail the class size.
In addition, Chen rejected certification of a class to claim driving expenses such as gas and car maintenance.
Uber has fought aggressively to avoid class status declaration. If Uber drivers are ultimately found to be employees it would require the company to pay at least minimum wage, overtime, require meal breaks and contributions to unemployment, disability and social security. As independent contractors, the drivers would be liable for their expenses.
Uber, along with Lyft and other companies use a software application, or app, for both drivers and potential riders to use on smart phones. It allows potential passengers to hail a rider from a nearby driver through the app. It has become wildly popular among riders as more efficient than calling taxis and popular among people who want to earn extra money driving because they only work when they turn on the app and accept riders.
Uber is likely to appeal the class certification decision.
The 9th U.S. Circuit Court of Appeal is already considering challenges to rejection of mandatory arbitration claims in its contracts.
And a separate case by Lyft drivers is expected to have a class certification hearing in February 2016.
Case: O’Connor v. Uber, No. 13-3826
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