Uber Pushes Federal Court to Find Drivers Are Not Employees

Uber Technologies Incorporated (“Uber” or the “Company”) is a company that provides a virtual marketplace, via website or cell phone application, for passengers to find available drivers. A class of drivers that utilize Uber to find customers is bringing a class action suit against the Company before Judge Edward Chen in the United States District Court for the District of Northern California. The class claims that Uber did not pay its drivers the full gratuity amount that Uber built into the price it charges customers and that the class members should have received as employees. Uber has filed for summary judgment, claiming that the drivers are not actually employees and are, therefore, unable to sue the company.1

Uber argues that the drivers are not employees because the drivers provide Uber with a percentage of their fares in exchange for passenger “leads,” and as such, the drivers are actually receiving a service from Uber. Even if the Court doesn’t find the drivers to be Uber “customers,” Uber argues that the drivers are still not Company employees because it did not set work schedules, did not set minimum work hours or assign territory, and never restricted drivers from working for other companies. Uber also did not supply drivers with tools or require them to report earnings.2

The drivers counter that Uber is very clearly a transportation service and, at the time of performing such services, the drivers are representatives and employees of Uber. Additionally, the class of drivers argues that drivers are mandated to follow many rules that Uber sets. For example, Uber provides direction as to how drivers are to interact with passengers, the cleanliness and appearance of their cars, their promptness, and other aspects. The drivers receive marks and can receive more or less work depending on how Uber “grades” them.3

Judge Chen has already granted Uber’s motion to remove claims of tortious interference and breach of contract, and Uber is asking for summary judgment on claims of unjust enrichment, gratuity violations, and misclassification of employees.4 The plaintiffs believe that they have strong claims against Uber and that they will obtain class certification. They argue that all drivers have had similar experiences, in that Uber charged their passengers for gratuity while not passing the full amount to the drivers and that they all had a reasonable expectation of receiving tips. Additionally, plaintiffs assert that all Uber drivers were subject to the Company’s requirements and they all had to cover their own expenses for their cars, gas, etc.5

This is not the first time Uber has run into legal problems. The Company has faced complaints from cities like New York, Boston, Chicago, and San Francisco about violating municipal rules regarding safety and pricing.6 Additionally, taxi drivers have joined labor unions to lobby against Uber’s presence in many cities.7 While Uber faces this class action lawsuit from drivers, a class of Uber passengers has recently brought another complaint against the Company. They argue that the transportation company tricked them into believing that the 20% gratuity included in their fare price was provided in total to the drivers.8

The legal team at SFMS has significant experience litigating class action matters. If you have any questions regarding this subject or this posting, please contact James E. Miller (jmiller@sfmslaw.com) or Michael Ols (mols@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd Finkelman Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS also maintains an affiliate office in London, England and is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.



1. http://www.law360.com/articles/601991

2. http://assets.law360news.com/0601000/601991//mnt/rails_cache/https-ecf-cand-uscourts-gov-doc1-035112431240.pdf

3. https://ecf.cand.uscourts.gov/cgi-bin/show_multidocs.pl?caseid=269290&arr_de_seq_nums=9&magic_num=&pdf_header=1&hdr=&pdf_toggle_possible=1&caseid=269290&zipit=&magic_num=&arr_de_seq_nums=9&got_warning=&create_roa=&create_appendix=&bates_format=&dkt=&got_receipt=1

4. http://www.law360.com/articles/601991

5. https://ecf.cand.uscourts.gov/cgi-bin/show_multidocs.pl?caseid=269290&arr_de_seq_nums=9&magic_num=&pdf_header=1&hdr=&pdf_toggle_possible=1&caseid=269290&zipit=&magic_num=&arr_de_seq_nums=9&got_warning=&create_roa=&create_appendix=&bates_format=&dkt=&got_receipt=1

6. http://knowledge.wharton.upenn.edu/article/an-uber-problem-for-cities-balancing-innovation-with-regulation/

7. http://www.washingtonpost.com/local/trafficandcommuting/cab-companies-unite-against-uber-and-other-ride-share-services/2014/08/10/11b23d52-1e3f-11e4-82f9-2cd6fa8da5c4_story.html

8. http://www.law360.com/articles/601991