A handful of Uber drivers sued the ride-share giant in 2013 alleging that they were functioning as company employees but improperly treated and underpaid as independent contractors. They claimed that Uber had been misclassifying not just them, but many other drivers as well.
Despite a hard fight and four hundred driver declarations to the contrary, the federal judge sitting in California found that Uber has not provided meaningful evidence that all its drivers prefer to be independent contractors or an argument as to why the decision regarding driver classification should proceed on an individual case by case basis.
Today, Judge Chen ordered that 160,000 Uber drivers should be certified as a class for the purpose of determining whether they were employees entitled to restitution of illegally withheld gratuities as well as other compensation and penalties. While this is a large number for a class action, it is actually a small portion of all California Uber drivers, as many of them have signed mandatory arbitration agreements and therefore cannot proceed against Uber in court.
A business model that is largely dependent on independent contractors in retrospect seems akin to a house built on sand.
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