By Howard Mintz
A federal judge Tuesday dealt a blow to Uber's efforts to neutralize a major legal challenge to its business model, finding that a lawsuit against the growing ride-booking company can proceed as a class action on behalf of most California drivers who have worked for the Bay Area outfit since 2009.
In a 68-page ruling, U.S. District Judge Edward Chen rejected Uber's argument that the case should not proceed as a class action -- an argument that would have made it far more difficult to successfully press legal claims that Uber drivers should be treated as employees instead of independent contractors.
While the judge carved out some exceptions, for the most part he allowed the case to move forward in a way that could cover the claims of as many as 160,000 or more Uber drivers. A similar case is unfolding in federal court in San Francisco against Lyft, and Chen's ruling could be used as fodder to back arguments for class-action status for those drivers.
Uber issued a statement indicating the company plans to appeal the decision to the 9th U.S. Circuit Court of Appeals, a move that could sidetrack the case before it reaches trial. "We'll most likely appeal the decision as partners use Uber on their own terms, and there really is no typical driver -- the key question at issue," an Uber spokeswoman said.
Lyft and Uber drivers have mounted major legal challenges to the flexible, on-demand business model, arguing that they should be classified as employees rather than independent contractors, a distinction that entitles them to strong protections and benefits under California law and threatens the cost structure of the so-called sharing economy.
The companies stress that drivers can work as much as they want and when they want, a come-and-go-as-you-please form of employment that gives them a financial slice of each Uber or Lyft ride they provide. In fact, the companies note that many drivers are signed on the same day with multiple ride-sharing apps, including Uber, Lyft and Sidecar.
Uber, in urging Chen to reject allowing the case to proceed on behalf of all California drivers, presented testimonials from about 400 drivers who indicated they preferred to retain their independent status. But the judge rejected that evidence in Tuesday's ruling, concluding it represented a "statistically insignifciant" percentage of affected Uber drivers with a stake in the legal fight.
But the judge identified numerous claims in the lawsuit that would be common to typical Uber drivers, such as pay, tips, schedules, firings and worker ratings enforced by the ride-booking service now valued in the billions. Chen did exclude group status for driver claims based on lack of reimbursement for expenses.
"Uber's class certification arguments are problematic," Chen wrote.
The stakes are high for Uber, which already has suffered setbacks in its bid to preserve the right to classify its drivers as independent contractors with less legal protections. The California Labor Commission ruled in June that a San Francisco-based Uber driver should be considered an employee and should receive compensation for mileage and other expenses, a decision that does not carry force in the courts but adds fuel to the standoff over labor rights.
(c)2015 the San Jose Mercury News (San Jose, Calif.)