Uber Lawsuit News and Updates 2019
Uber lawsuit and settlement News Updates in 2019.
Uber News: Uber Must Halt Ride-Share Operations In Germany Effective Immediately, Court Rules
December 24, 2019
Author: Daniel Gala
Finding that the embattled international ride-share giant has violated Germany’s ride-for-hire dispatch laws, a judge in Frankfurt has banned Uber from operating in the country, effective immediately.
The ruling, delivered December 19, marks Uber’s latest setback in European markets, where it has had significant trouble navigating the complex regulatory environment, especially since a 2017 decision by the Court of Justice of the European Union found Uber to be a transportation company rather than, as it has argued, a technology company.
The Frankfurt court’s recent ruling banning Uber from the German market comes almost exactly two years to the day after that pivotal 2017 decision by Europe’s high court.
The seemingly trivial distinction of whether Uber qualifies as a technology company or a transportation company has potentially vast ramifications under the law. With regards to Germany, as a transportation company, Uber must comply with the country’s strict rules governing for-hire drivers and vehicles. A 2015 ruling by a German court has prevented Uber from freely hiring drivers who use their own private vehicles, as it does in other jurisdictions, but instead has forced Uber into a collaboration with specially licensed drivers and rental-car companies.
However, a number of aspects of this arrangement have rendered it invalid, the German court ruled. Because Uber holds itself out as the provider of the transportation, the decision says, it is beholden to rules to which it has not adhered.
“From a passenger’s point of view, Uber provides the service itself and is therefore an entrepreneur,” said the presiding judge, according to Reuters.
In addition to engaging in illegal unfair competition, the court also found Uber in violation of the requirement that rental cars return to their company’s main office following each ride provided to a paying passenger.
Uber did not say immediately whether it intended to appeal the decision.
“We will assess the court’s ruling and determine next steps to ensure our services in Germany continue,” an Uber spokesperson said, per Reuters.
The ruling comes as a result of a lawsuit filed by Taxi Deutschland. The company is seeking immediate enforcement of the ban with penalties starting at 250 euros and escalating as high as 250,000 euros for each ride Uber conducts in violation thereof.
Uber has struggled to gain a foothold in European markets, where it has faced more robust regulatory resistance than it has in its home country of the United States. Having already been banned in places like the city of Copenhagen, Denmark and the nation of Hungary, Uber also recently lost its license to operate in London, England, perhaps its most important overseas market.
In addition to facing efforts by jurisdictions around the globe to reign in its highly controversial operations, Uber also finds itself embroiled in thousands of lawsuits and arbitration actions brought on behalf of its drivers, who claim Uber has misclassified them as independent contractors rather than employees.
Additionally, Uber faces numerous lawsuits filed by the alleged victims of criminal acts claimed to have been perpetrated by its drivers, including sexual assaults and even killings. Plaintiffs in these cases argue that Uber should be held liable for the actions of its workers in part because Uber’s questionable screening process and other shoddy safety measures have put passengers directly at risk.
Sources:
Reuters. (19 December 2019). German court bans Uber’s ride-hailing services in Germany
Lomas, N. (19 December 2019). Uber’s ride-hailing business hit with ban in Germany. Tech Crunch
Lomas, N. (20 December 2017). Blow to Uber in Europe as top court rules it’s a transport service. Tech Crunch
Uber News: Judge: NYC Ride-Share Cruising Cap “Arbitrary and Capricious’
December 24, 2019
Author: Daniel Gala
In a victory for multi-billion-dollar ride-share giant Uber over local efforts to regulate its drivers’ impact on already-congested roadways, a state-court judge has struck down an attempt by New York City to place a limit on the percentage of time Uber drivers may operate their vehicles without passengers in them.
Judge Lyle Frank determined that the city’s so-called “cruising cap” qualified as “arbitrary and capricious” under the law, providing a basis for him to strike down the regulation, which was set to take effect in February 2020. The ruling results from a lawsuit filed by Uber in September 2019.
Supporters of the regulation have argued that it is an important step in curbing the impact the sudden influx of ride-share drivers have had on an already-strained traffic system, as well as the additional exhaust these vehicles have spewed into air already saturated with unhealthy pollution.
The cruising cap would have covered only a limited, extremely highly congested part of the city, applying just to areas of Manhattan south of 96th Street. Passed by the New York City Taxi and Limousine Commission, the rule sought to cap cruising, or driving without passengers, in that region to 36% by February 2020 and 31% six months later, according to Reuters.
Data shows that, in New York City, Uber drivers drove without passengers 41% of the time in 2018.
Uber characterized its challenge to the local regulations as a move made in support of its drivers and continued to deny its roll in ever-worsening congestion in urban areas worldwide despite mounting evidence to the contrary.
“Uber remains committed to fighting for driver flexibility in the face of politically motivated regulations and to stand up for policies that actually combat congestion,” Uber said in a statement quoted in part by Reuters.
Efforts to overturn local attempts by democratically elected officials to regulate its controversial operations are far from the only thing landing the embattled ride-share giant in court these days. Uber also faces thousands of lawsuits and arbitration demands filed by the very drivers it consistently claims to be acting in the best interests of, claiming that the company has misclassified them as independent contractors rather than employees, a distinction that costs drivers the right to a minimum wage, overtime pay, and the ability to unionize, while also short-changing governments millions if not billions of dollars annually in payroll taxes and other assessments.
Even more troubling, Uber is facing numerous lawsuits filed on behalf of the victims of criminal acts allegedly perpetrated by its drivers upon their passengers and others, including sexual assault and even killings. A recent report issued by the company showed that thousands of sexual assaults had been reported on its platform.
Source:
Reuters. (23 December 2019). In win for Uber, judge strikes down New York City’s cruising cap
Uber Lawsuit News: Colombian Judge Orders Uber To Pause Operations In Country
December 23, 2019
Author: Daniel Gala
A judge in the country of Colombia has ordered Uber to suspend its operations there after a taxi company sued the American ride-sharing giant over alleged unfair business practices.
The decision by a judge at Colombia’s Superintendency of Industry and Commerce—announced Friday, December 20—came as a result of a lawsuit filed by Cotech SA, which provides a technology platform for hailing taxi services.
“[Uber’s conduct] violates the rules that regulate the market, generates a significant advantage in the market, and generates deviation from the clientele of Cotech,” the Superintendency said in a statement quoted in part by Bloomberg.
The suspension of Uber’s ability to operate within Colombia applies only to its ride-sharing business. Uber’s food-delivery platform will not be impacted by the ruling.
For its part, Uber maligned what it characterized as a wrong-headed decision by Colombian regulators.
“After years of working proactively to bring sensible regulations for ride sharing to Colombia, we regret that with today’s decision the Superintendency of Industry and Commerce has failed to follow Colombian law and its regular process,” Uber said in a statement, also quoted in part by Bloomberg.
Though the judge’s order takes effect immediately, Uber has said it will appeal the decision. Additionally, the Superintendency would need to issue an additional, separate order to enforce the ruling, according to the agency’s head, Andres Barreto.
However, it is unclear whether Uber would risk the potential legal and reputational damage a refusal to voluntarily follow the ruling would possibly entail. The multi-billion-dollar ride-share giant has been operating in the country since 2013, during which time it has been faced with fierce opposition from local taxi drivers and ride-for-hire companies.
Uber has offered services in 11 different Colombian cities, according to the Associated Press. Uber says that it has more than 2 million users and 88,000 drivers in the country. In October, it abandoned plans to construct a $40 million support and services center in Colombia.
The order to cease operations in Colombia is just the latest legal challenge facing the embattled company at home and abroad. Internationally, the Colombia ban comes on the heels of a decision by regulators in London, England—one of Uber’s most important overseas market—not to renew the company’s license to operate there, and it comes during the same week that a German court found that the company has violated that country’s transit dispatch laws.
In the United States, Uber faces similar quarrels with a number of local municipalities, including New York City, which has endeavored to place ever-greater restrictions on the company’s operations within its jurisdiction, with studies showing that ride-share vehicles have contributed significantly to traffic congestion and vehicle emissions, particularly during the large percentage of the time in which ride-share vehicles are in operation on city streets without paying riders in them.
Uber also faces thousands of lawsuits and arbitration actions filed on behalf of Uber drivers challenging their classification as independent contractors rather than employees, a legal distinction that saves the multi-billion-dollar company millions if not billions of dollars annually while costing drivers employment rights such as a minimum wage, overtime pay, and the ability to unionize.
Additionally, Uber has faced growing backlash over allegations that it should be held responsible for the staggering number of sexual assaults and other criminal acts claimed to have been perpetrated by its drivers, who critics allege are inadequately screened by the company, giving unsafe drivers access to vulnerable passengers.
Sources:
Medina, O. and Chapman, L. (20 December 2019). Uber Ordered by Judge to Suspend Service in Colombia. Bloomberg
The Associated Press. (21 December 2019). Colombia orders Uber to halt its operations after lawsuit
Uber News: Uber To Pay $4.4M To Fund For Victims Of Sexual Harassment And Retaliation At Company
December 23, 2019
Author: Daniel Gala
As part of a pre-litigation settlement agreement with the U.S. Equal Employment Opportunity Commission (EEOC), embattled ride-sharing giant Uber has agreed to pay $4.4 million into a fund for victims of sexual harassment and retaliation at the multi-billion-dollar transportation company.
“Uber Technologies, Inc. has entered into a nationwide agreement to strengthen its business culture against sexual harassment and retaliation,” said an EEOC press release dated December 18, adding later, “Uber will establish a class fund of $4.4 million to compensate anyone who the EEOC determines experienced sexual harassment and/or related retaliation after January 1, 2014.”
The settlement marks the culmination of a multi-year EEOC investigation into allegations that Uber was permeated by a “tech bro” business culture in which sexual harassment, retaliation, and other forms of unlawful discrimination were allowed to run rampant.
“This settlement resolves a 2017 EEOC Commissioner’s Charge of sex discrimination, ending an extensive investigation in which the EEOC found reasonable cause to believe that Uber permitted a culture of sexual harassment and retaliation against individuals who complained against such harassment, in violation [sic] Title VII of the Civil Rights Act of 1964,” the EEOC press release said.
The EEOC touted the settlement as an example of industry working in collaboration with regulators to reach a solution that will benefit present and future workers while compensating past victims.
“This resolution demonstrates the benefits of working cooperatively with EEOC and serves as a model for businesses committed to truly leveling the playing field where opportunity is not circumscribed by one’s gender,” said EEOC Chair Janet Dhillon.
“This agreement will hopefully empower women in technology to speak up against sexism in the workplace knowing that their voices can yield meaningful change,” added EEOC Senior Trial Attorney Ami Sanghvi, who served as an advisor to the investigation into Uber.
As part of the settlement, a claims administrator will notify all female employees who worked at Uber for any portion of the period January 1, 2014 through June 30, 2019.
“Potential claimants will be able to submit a response to a questionnaire that will allow the EEOC to determine whether they may be eligible for monetary relief,” the EEOC’s press release explains.
The $4.4 million EEOC settlement is just the latest legal or regulatory penalty to be levied against Uber for a range of alleged misdeeds, from misclassifying workers to operating in violation of local rules to allowing unsafe drivers access to vulnerable customers. In all, the company faces thousands of lawsuits, arbitration demands, and regulatory actions, including multiple class actions.
Source:
United States Equal Employment Opportunity Commission (EEOC). (18 December 2019). Uber to Pay $4.4 Million to Resolve EEOC Sexual Harassment and Retaliation Charge. Press Release
Uber Lawsuit News: More Than 50 Uber Drivers Sue Under New California Employment Law; Plaintiffs Say Class Could Grow To 75,000
December 23, 2019
Author: Daniel Gala
A group of more than 35 California-based Uber drivers filed in federal court on Wednesday, December 18 a putative class-action lawsuit arguing that they should be classified as employees rather than independent contractors under a recent California Supreme Court decision and a new California employment law set to go into effect January 1, 2020.
By December 20, more than 50 total plaintiffs had joined the case.
The complaint is at least the second putative class action to be filed in the US District Court for the Northern District of California since the passage of the new state employment law, known as AB 5. On December 16, US District Judge Edward M. Chen rejected Uber’s efforts to toss out in its entirety a similar case filed in October.
AB 5, which passed the state legislature and was signed into law by Governor Gavin Newsome earlier this year, codifies the California Supreme Court’s landmark decision known as the Dynamex case. In that case, the court established a new test for determining whether a worker qualifies as an employee or an independent contractor under California law. The new test, known as the ABC Test, is widely viewed as making it more likely that workers, in particular those working in the so-called “gig economy”, will be classified as employees rather than independent contractors.
Even before the law’s passage, thousands of Uber drivers across the United States had filed lawsuits and arbitration demands arguing that the company has misclassified their employment status, which costs them rights such as a minimum wage, overtime pay, and the ability to unionize that are afforded to workers recognized as employees.
“From at least April 2018, when the Dynamex decision was issued by the California Supreme Court, and continuing to the present, and pursuant to company policy and/or practice and/or direction, UBER failed to pay Plaintiffs and other Class Members minimum wage and/or overtime, and UBER did not reimburse for work-related expenses, such as mileage and cell phone usage,” the new complaint, filed December 18, alleges.
According to the lawsuit, the class of plaintiffs potentially could grow to include tens of thousands of Uber drivers.
“Plaintiffs are informed and believe and, based thereon allege, that the Class Members consist of approximately 50,000-75,000 current and former UBER employees who worked as UBER ‘ride-share drivers’ and who opted out of the arbitration provision,” the complaint states.
The December 18 lawsuit names seven causes of action based on alleged violations of the California labor code and other laws: (1) failure to pay timely earned wages during employment and upon separation of employment; (2) failure to pay minimum wages in violation of the California labor code; (3) failure to maintain records; (4) failure to provide accurate wage statements; (5) failure to pay minimum wages in violation of the Fair Labor Standards Act (FLSA); (5) failure to pay required minimum wages in violation of FLSA; (6) failure to pay required overtime wages in violation of FLSA; and (7) violations of the Unfair Business Practices Act.
As compensation for these alleged violations, the plaintiffs seek damages for: loss of earnings and deferred compensation (with interest thereon); general unpaid wages at overtime wage rates; restitution of unpaid wages; applicable statutory penalties; and reasonable attorneys fees and costs.
Additionally, plaintiffs seek a declaratory judgment affirming “that UBER’s ride share drivers, Plaintiffs and Class members herein, are not independent contractors, but employees, under the Dynamex ABC Test.”
Uber and its ride-share competitor Lyft have made it clear that they view changes to the employment status of their millions of drivers worldwide as an existential threat to their companies’ business models, and they are taking their opposition not only to the courtroom, where they have vowed to fight lawsuits such as the one filed December 18, but also to the ballot box, pledging millions in support for a California ballot initiative that essentially would reverse the Dynamex decision and AB 5.
Despite years of litigation already having taken place over the employment status of Uber drivers and other gig-economy workers, it appears as if the real fights over the future of workers’ rights under the law are only just beginning.
Sources:
United States District Court Northern District of California. (18 December 2019). Class Action Complaint For Damages, Penalties, Attorneys Fees, And Injunctive Relief For, Inter Alia, Labor Code Wage And Hour Violations. Case# 4:19-cv-08228-PJH. Nicholas-v-Uber Technologies, Inc
United States District Court Northern District of California. (Accessed 20 December 2019). Civil Docket For Case# 4:19-cv-08228-PJH. Nicholas-v-Uber Technologies, Inc
Uber News: Judge Rejects Uber’s Attempt To Dismiss First Case Under New Calif. Employment Law
December 19, 2019
Author: Daniel Gala
A federal judge in San Francisco has rejected a request by ride-sharing giant Uber to dismiss in its entirety the first case to be brought under a new California employment law aimed at making it more difficult for employers to classify workers as independent contractors rather than employees.
In an order issued December 16, US District Judge Edward M. Chen granted Uber’s request to dismiss three out of seven counts contained in the class action complaint of plaintiff Thomas Colopy but denied Uber’s request with regards to the remaining counts, allowing the lawsuit to proceed.
The putative class action, filed October 8, 2019, alleges that “Uber has misclassified its drivers, including Plaintiff Thomas Colopy, as independent contractors when they should be classified under California law as employees.”
“Based on the drivers’ misclassification as independent contractors, Uber has unlawfully required drivers to pay business expenses (including but not limited to the cost of maintaining their vehicles, gas, insurance, phone and data expenses, and other costs) in violation of [the California labor code],” the complaint continues.
The class action lawsuit further alleges that “Uber has failed to guarantee and pay its drivers minimum wage for all hours worked”; “failed to pay overtime premiums for hours worked in excess of eight hours per day or forty hours per week”; and “failed to provide proper itemized wage statements,” also in violation of California labor laws.
In his order, Judge Chen granted Uber’s motion to dismiss on three counts related to allegations of (1) the willful misclassification of Uber drivers as independent contractors; (2) nonpayment of minimum wage; and (3) nonpayment of overtime hours.
As it pertains to the nonpayment of minimum and overtime wages, however, the court made clear in its order that the rulings were based only on the plaintiff’s claim not having been supported by sufficiently specific evidence.
“Plaintiff fails to allege with sufficient specificity concrete violations of wage laws,” the order states. “Complaints alleging far greater detail than the one at issue here have been found insufficiently pled.”
The court then specifically “permits Plaintiff leave to amend” in order to provide supplemental information, meaning that the plaintiff is likely to reassert these claims while providing greater evidentiary support as to specific alleged violations.
Additionally, despite dismissing three of the plaintiff’s counts, Judge Chen allowed four counts to proceed, including those (1) seeking a declaratory judgment that Uber has been in violation of the California labor code with regards to driver classification; (2) alleging a failure to reimburse drivers for business expenses; (3) claiming Uber has failed to provide properly itemized wage statements; and (4) arguing that Uber’s misclassification of its drivers amounted to a violation of California’s unfair competition law.
That these four counts survived Uber’s effort to have the lawsuit tossed out in its entirety means that the first-of-its-kind lawsuit under California’s newly enacted AB 5, which codified into state law the California Supreme Court’s landmark Dynamex ruling, will continue forward.
The Dynamex decision adopted a new test, known as the ABC Test, for the purposes of determining whether a worker qualifies as an independent contractor or an employee. The ABC Test, which has been adopted by a growing number of jurisdictions including the state of Massachusetts, is widely regarded as making it much more likely that gig-economy workers, including Uber drivers, will qualify as employees, a legal distinction that grants workers a host of additional rights including the right to a minimum wage and overtime pay as well as the ability to unionize.
While the plaintiff Colopy’s putative class action is the first to be brought under the new California law, which is set to take effect January 1, 2020, thousands of other Uber drivers have filed lawsuits and arbitration demands challenging their employment classification. While, to date, Uber has continued to classify its drivers as independent contractors, the company has agreed to tens of millions of dollars in payouts to settle driver-classification claims.
Sources:
United States District Court Northern District of California. (8 October 2019). Class Action Complaint. Case 3:19-cv-06462-EMC. Thomas Colopy, Plaintiff, v. Uber Technologies, Inc., Defendant
United States District Court Northern District of California. (16 December 2019). Order Denying Plaintiff’s Motion For Preliminary Injunction, Granting In Part And Denying In Part Defendant’s Motion To Dismiss, And Denying Defendant’s Motion To Strike. Case 3:19-cv-06462-EMC. Thomas Colopy, Plaintiff, v. Uber Technologies Inc., Defendant
Uber Lawsuit News: Former Driver Sues Uber Alleging He Was Fired After Protesting Company
December 13, 2019
Author: Daniel Gala
A former driver for Uber has sued the ride-share company alleging that he was deactivated from its platform after a photograph of him protesting the company was published in the news media.
Ahmed Youssef claims in a federal lawsuit filed December 11 in the Northern District of Illinois that he was permanently banned from the Uber platform after the Chicago Tribune published a photo of him participating in a peaceful protest against Uber and its ride-sharing competitors Lyft.
During the October 2018 protest, Youssef held a sign reading, “Lyft/Uber Respect Chicago Drivers.”
After investing $75,000 in a Lincoln Navigator which Youssef used as a driver for Uber Black, Uber’s higher-priced service offering rides in luxury vehicles, he claims he was fired for his participation in the protest.
“Youssef was terminated from Uber solely based on his participation in the peaceful protest pursuant to his First Amendment right as a private citizen,” alleges Youssef’s complaint, as quoted by Bloomburg.
The lawsuit acknowledges that Uber claims to have fired Youssef for unrelated violations of its terms, including the claiming of false charges and fees and creating multiple accounts.
The complaint represents yet another legal entanglement for the multi-billion-dollar ride-sharing giant, which is struggling to maintain growth while curbing losses following its highly anticipated but highly disappointing initial public offering earlier this year.
While Youssef’s claims are somewhat unique, Uber faces a number of lawsuits across the United States seeking to hold the company liable for the alleged misdeeds of its drivers, including sexual assaults and killings. Additionally, thousands of lawsuits and arbitration demands have been filed by drivers challenging their classification as independent contractors rather than employees, and the company has faced investors lawsuits claiming that Uber issued misleading information in the run-up to that so-far disappointing IPO.
Add to the mix the scores of regulatory skirmishes in which the company is embroiled as it fights to maintain and gain access to markets around the globe, and Uber has surely earned its reputation as a highly litigious bull-in-a-China-shop that is perfectly comfortable asking forgiveness later rather than permission first, even if that approach winds them up in court.
Sources:
United States District Court Northern District of Illinois. (11 December 2019). Docket. Ahmed Youssef v. Uber Technologies, Inc
United States District Court Northern District of Illinois. (11 December 2019). Docket. Ahmed Youssef v. Uber Technologies, Inc
Uber News: Uber Legal Woes Expand To “Dangerous” E-Scooters
December 8, 2019
Author: Daniel Gala
It seems that in every new business or market in which the ride-sharing giant Uber treads, legal problems are soon to follow.
Facing serious allegations of sexual assault and other violent criminal acts perpetrated by its drivers; regulatory, legislative, and legal action challenging its classification of its drivers as independent contractors rather than employees; barriers imposed by local governments to its ability to operate in key jurisdictions; and investor lawsuits claiming the company misstated key factors in the runup to its highly disappointing IPO, Uber now finds itself embroiled in yet another type of lawsuit: one claiming that its e-scooters are unsafe.
The lawsuit, filed by Atlanta resident Zella Turner, claims that the plaintiff suffered serious injuries in January 2019 as a result of faulty breaks on the Uber electric scooter she was operating. The accident, which took place at the intersection of Peachtree Street and John Portman in Atlanta, allegedly resulted in serious injuries, including 15 stitches to the face, to the mother of five who says she began using the e-scooters in lieu of a 40-minute walk on her daily commute. The plaintiff Turner also was forced to undergo facial reconstruction surgery, according to the Atlanta Journal-Constitution.
“She’s still dealing with neurological issues and is being evaluated for that,” one of Turner’s attorneys, Alan Holcomb, told the AJC.
Uber’s Jump e-scooters have been available in the Atlanta metro area for roughly a year, during which time they have resulted in four fatal accidents, prompting Mayor Keisha Lance Bottoms to issue a ban forbidding the use of e-scooters after dark, according to the AJC.
Turner’s lawsuit accuses Uber of concealing the dangers related to its Jump e-scooters, particularly the brakes.
“It’s a pretty widespread problem,” Turner’s attorney Holcomb said, “I don’t think it’s specific to the scooter [Turner] was on.”
Uber also has admitted to experiencing issues with the brakes on its e-bikes after previously fixing a serious issue without ever warning customers that a danger existed. That issue related to the front wheel of the bikes locking when even slight pressure was applied to the brake and is similar to the problem Turner alleges caused her e-scooter accident.
Turner also sued the companies Ninebot and Segway, which are responsible for designing Uber’s e-scooters and e-bikes.
Sources:
Habersham, R. (5 December 2019). Atlanta woman sues Uber, says faulty e-scooter brakes led to injuries. The Atlanta Journal-Constitution
Hawkins, A.J. (1 April 2019). Uber sued for $10 million by woman who was sexually assaulted by her driver. The Verge
Scheiber, N. (12 September 2019). New Lawsuit Against Uber Is Set to Test Its Classification of Workers. The New York Times
BBC News. (22 September 2017). What does London’s Uber ban mean?
Hals, T. (1 April 2019). Uber’s Kalanick, directors win dismissal of investor lawsuit. Reuters
Uber News: Uber 2018 Safety Report: 3,045 Sexual Assaults; 10 Killings; 58 Traffic Fatalities
December 7, 2019
Author: Daniel Gala
Amid a flurry of allegations raising serious questions about the safety of its platform, ride-sharing giant Uber issued on December 5 its first ever US Safety Report revealing that more than 3,000 sexual assaults had been reported on the platform in 2018 alone. The report further showed that 10 Uber-related killings also had taken place during that year.
Although Uber attempts throughout the report to frame the statistics in terms of their relatively small likelihood when compared to the millions of Uber rides that take place in the United States every day, the data reveals in precise detail the staggering scope of serious incidents to involve Uber passengers and drivers in the United States.
Sexual Assaults Involving The Uber Platform
Revealing publicly for the first time hard numbers behind a widely reported phenomenon, Uber says it received 3,045 reports of sexual assaults in 2018. While this actually represents a 3.7% increase from the 2017 figure of 2,936 reported incidents, Uber frames the statistics in terms of incident rate. Since Uber reports having completed 1.3 billion rides in 2018 versus 1.0 billion in 2017, the company reports a 16% decline in incident rate, even though the company saw an increase in the actual number of sexual assaults reported.
Precise figures pertaining to the number of sexual assaults involving Uber passengers and/or drivers have been difficult to ascertain, and despite Uber’s US Safety Report offering a previously unavailable level of detail, it is likely even these figures underrepresent the number of actual incidents.
While Uber claims that it “has intentionally been overinclusive in determining what incident reports and circumstances to capture within [its] data standards,” it also concedes that “sexual assault is also one of the most under-reported crimes in the US generally, with some researchers believing that nearly 3 out of 4 sexual assaults go unreported to police,” meaning the actual number of sexual assaults involving the Uber platform is very likely much higher than the reported number, potentially by several multiples.
Uber divides the reported incidents of sexual assault into five categories: Non-consensual kissing of a non-sexual body part (594 reported incidents); attempted non-consensual sexual penetration (280 reported incidents); non-consensual touching of a sexual body part (1,560 reported incidents); non-consensual kissing of a sexual body part (376 reported incidents); and non-consensual sexual penetration, aka rape (235 reported incidents).
In addition to publishing the percent change of the incident rate, a misleading statistic that allows for the appearance of double-digit declines while the actual number of reported incidents has increased, Uber also includes in its report the percent of total trips in which such incidents occur, a tactic clearly intended to give the impression that, however tragic and serious the reported incidents, their occurrence actually is vanishingly small.
For example, while Uber reports 1,560 reported incidents of “Non-Consensual Touching of a Sexual Body Part”, it also states that this represents 0.00001% of total trips. Similarly, the 235 reported incidents of “Non-Consensual Sexual Penetration”—known more commonly as rape, a horrific, life-altering tragedy for victims—are couched as representing 0.00002% of total rides. And, even though the total number of reported rapes increased in real terms from 229 in 2017 to 235 in 2018, Uber lists the incident rate as having decreased by 17%.
Tellingly, the sexual assault data shared in the report’s executive summary is framed not in terms of the actual number of reported incidents—figures that are notably absent from the summary and which can only be found buried some 50 pages into the report itself—but in terms of the number of reported incidents per US trip (e.g. “Non-Consensual Sexual Penetration—the most serious sexual assault category—was reported to occur in about 1 in 5,000,000 US trips, or on approximately 0.00002% of US trips”; and “From 2017 to 2018, Uber saw approximately a 16% decrease in the average incident rate of the 5 most serious sexual assault categories reported.”)
Uber’s attempt to spin the very data it is revealing in a purported effort at transparency does not stop at its inclusion of certain misleading statistics. In one section, the company even seems to blame the media for creating the false impression among the public that more of the alleged sexual assaults reported on its platform are claimed to have been committed by Uber drivers against passengers rather than vice versa, as if this were a relevant distinction when it comes to the overall safety of its platform for all parties.
Under the heading “The facts about who reports sexual assault” the company writes, “Uber data suggests that both riders and drivers face sexual assault incidents on our platform. According to an analysis of 2,894 media mentions that referenced sexual assault with the possible connection to Uber, the vast majority of references (92%) focused on the driver party as the potential perpetrator, while only 8% highlighted incidents in which the rider party was accused.”
The report continues, “In reality, riders account for nearly half (45%) of the accused parties across the 5 most serious sexual assault categories. Drivers have a right to have their experience told, and we have the responsibility to stand with them—so that we can create the safest possible environment for drivers and passengers.”
Across the United States, numerous lawsuits have been filed against Uber by the alleged victims of sexual assault perpetrated by its drivers. These lawsuits seek to hold the multi-billion-dollar ride-sharing giant liable for these acts under a legal doctrine that holds employers responsible for the actions of its workers when performed within the scope of their employment.
Fatal Physical Assaults Involving The Uber Platform
Another worrying safety consideration when it comes to Uber drivers and passengers is the number of fatal physical assaults involving the platform. These killings numbered ten in 2017 and nine in 2018.
Of the 19 killings to take place over the two-year span, eight of the deceased parties were Uber passengers; seven were Uber drivers; and four were “third parties (such as bystanders outside the vehicles)”.
As with the sexual assault data, Uber presents the fatal physical assault numbers so as to downplay their apparent frequency.
“During 2017 and 2018, there were 19 fatal physical assaults occurring in a total of 18 incidents in relation to Uber, which accounts for approximately 0.000001% of total trips or 1 in 122,000,000 trips.”
Uber also emphasizes that “the accused party is not necessarily a party using the Uber platform. In fact, in many of the fatal incidents reported to Uber, it was a third party who was accused of fatally wounding a rider or driver using the Uber app. Additionally, the deceased party is not always a rider or driver using Uber; the deceased party can be a third party if a driver or rider using the Uber platform was otherwise involved (i.e., as the accused party).”
Conclusion
Though Uber’s inaugural US Safety Report reveals publicly for the first time the large number of sexual assaults reported on its platform annually, the company clearly attempts to portray the report as an unprecedented step toward transparency while downplaying the occurrence of sexual assaults and fatal physical assaults involving its platform.
“Uber’s US Safety Report, the first comprehensive publication of its kind to be issued by a company, shares details on Uber’s safety progress, its processes, and data related to the reports of the most serious safety incidents occurring on our platform,” the report states, adding later, “As the numbers in this report show, critical safety incidents on our platform are, statistically, extremely rare.”
Despite its self-congratulatory accolades pertaining to the supposedly ground-breaking nature of its report, in the broader context, Uber’s US Safety Report amounts to a public-relations exercise aimed at countering the slew of negative attention the company—and ride-sharing platforms generally—have received over their paltry safety record.
For example, following an in-depth investigation into Uber’s so-called Special Investigations Unit—the company’s internal outfit purportedly tasked with receiving and responding to reports of driver misconduct—The Washington Post reported wide-ranging problems perpetuated by an emphasis on absolving the company from liability rather than assisting victims and holding potentially dangerous drivers to account.
“Investigations are there first to protect Uber; and then to protect the customer,” former Uber investigator Lilli Flores told the Post. “Our job is to keep the tone of our conversations with customers and drivers so that Uber is not held liable.”
Amid such media reports and continuing allegations of violent criminal activities involving Uber, it is doubtful whether any amount of data-spinning by the ride-sharing giant will help assuage growing public concerns over the safety of the Uber platform.
Sources:
Uber Technologies, Inc. (5 December 2019). 2017-2018 US Safety Report
Bensinger, G. (26 September 2019). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. The Washington Post
Uber News: Man Convicted Of Committing Torture While In Somalia Was Driving For Uber In US
December 4, 2019
Author: Daniel Gala
In one of the more extreme examples of the inadequacy of Uber’s driver-screening process, a former Uber driver has been convicted of committing acts of torture while a colonel in the Somali national army under dictator Mohammed Siad Barre.
Prior to his arrest on the allegations of war crimes, Yusuf Abdi Ali had served as an Uber driver in Virginia. He was arrested on allegations that he had ordered men under his command to torture and shoot Somali citizen Farhan Tani Warfaa roughly 30 years ago while both were in Somalia.
Warfaa said that, in 1987, Colonel Ali’s soldiers had kidnapped him and removed him from his home in northern Somalia to a detention center where, for months, he was subject to brutal treatment and harsh interrogations. Prosecutors alleged that all acts against Warfaa had been committed under the orders of Ali, the battalion commander.
On Tuesday, December 3, a jury in Alexandria, Virginia found the former colonel guilty.
“I am very, very satisfied with the outcome,” the victim, Mr. Warfaa, said via a translator, according to Stock Daily Dish.
Despite the U.S. government being unable to confirm how the now-convicted Ali managed to re-enter the United States after being deported in 1996, the former war criminal somehow managed to secure a job offering rides to passengers for Uber, driving for the company for 18 months. Ali also drove for Uber’s ride-sharing competitor Lyft.
Both companies have been under recent scrutiny for failure to adequately screen drivers to ensure passenger safety. Ride-sharing drivers have been accused of a host of improper acts, from ignoring a passenger while she was being robbed by other passengers in the back seat to committing violent acts such as rape and murder.
Scores of lawsuits have been filed against Uber seeking to hold it accountable for alleged acts of its drivers. Uber has sought to avoid responsibility by arguing that its drivers are independent contractors, not employees, and that Uber is therefore not liable for actions performed within the scope of their work for the company.
While Mr. Warfaa may have achieved justice after 31 long years of thwarted efforts, Uber passengers are left with just another example of Uber’s failure to ensure the safety of its passengers by adequately screening drivers.
Source:
Stock Daily Dish. (3 December 2019). Virginia Uber driver was Somali war criminal
Uber Lawsuit News: Passenger Sues Uber Over Alleged Mid-Ride Robbery
December 2, 2019
Author: Daniel Gala
An Uber passenger has sued the ride-sharing giant seeking to hold it accountable for an alleged mid-ride robbery during which she says her driver ignored her pleas for assistance.
According to the lawsuit, 31-year-old Uber passenger Bethel Balai was taking a shared, multi-passenger ride In Brooklyn on January 13 when she was robbed in the backseat by her fellow passengers. Balai claims that Uber driver Ikram Khamzaev did nothing, failing to respond to her calls for help.
The lawsuit, reported by the New York Post, is just the latest to be filed by an Uber passenger seeking to hold the company liable for the alleged misdeeds of its drivers. Unlike the lawsuit filed by Balai, which is based on the driver’s alleged inaction, scores of lawsuits have claimed criminal acts on the part of Uber’s drivers themselves, including sexual assault and even murder.
Plaintiffs are seeking to hold Uber liable for the acts of its drivers under a legal doctrine known as respondeat superior, which says that employers are responsible for actions performed by their workers within the scope of their employment.
Uber has argued that it should not be held responsible for its drivers’ acts because Uber drivers are independent contractors rather than employees, a legal distinction that essentially treats each Uber driver as if he or she were operating his or her own individual business.
In addition to lawsuits filed over the alleged misdeeds of Uber drivers, the ride-sharing giant also faces thousands of legal actions brought on behalf of drivers challenging their employment classification. It is estimated that gig-economy employers like Uber save 20-30% on labor costs by classifying their workers as independent contractors rather than employees.
Unlike employees, independent contractors do not receive a legally-mandated minimum wage or mandatory overtime pay, do not have the right to unionize, and are required to split payroll tax costs with their employers.
Though it makes billions of dollars by keeping a portion of every ride’s fare, Uber claims that it is not a transportation company but a technology company, meaning that its hundreds of thousands of drivers do not operate in an area core to its business.
Source:
Balsami, D. (1 December 2019). Woman says Uber driver ‘ignored’ her cries for help during backseat robbery. New York Post
Uber Lawsuit News: Uber Not Liable For Alleged Rape By Former Driver With Uber Decal; May Be Negligent
November 27, 2019
Author: Daniel Gala
A United States magistrate judge has found ride-sharing giant Uber not liable for an alleged rape perpetrated by a former driver who still had the Uber decal displayed in his vehicle window when he offered the woman a ride from a San Francisco Bay Area shopping mall in 2018. According to the alleged victim, the Uber decal gave her a false sense of security that led her to accept the offer of a ride from a total stranger.
The magistrate’s ruling did leave the door open for a potential negligence claim, a claim which an attorney for the alleged victim said his client would be pursuing.
Despite finding that the former driver was not acting within the scope of his employment when he perpetrated the alleged rape, in her decision, US Magistrate Judge Jacqueline Scott Corley also stated that if it could be shown that there was an “intentional failure to retrieve” the Uber decal from the decommissioned driver, such evidence could be grounds for a negligence claim, even rising “to a level of ‘extreme indifference’ necessary to support an award of punitive damages.”
An attorney for the alleged victim immediately made clear that his client would be refiling her claim in light of the judge’s ruling.
“We are going to amend the complaint and proceed with the case,” said Matthew Davis, a lawyer representing the plaintiff, according to Bloomberg.
The raising of the negligence claim by the magistrate was an apparent repudiation of Uber’s argument that the alleged rape had resulted from nothing more than “a chance encounter with a predator.”
The alleged perpetrator is facing pending criminal action over the incident. He previously had served as an Uber driver after being suspended for reportedly harassing a female passenger.
The issue of whether and to what extent Uber is responsible for the actions of its drivers—ranging from traffic accidents to alleged rapes and even killings—is a central issue in dozens of active legal proceedings, and courts and legislatures have yet to establish bright-line rules governing the liability of so-called “gig economy” employers under the legal doctrine of respondeat superior, which holds employers liable for acts committed by their workers within the scope of their employment.
In the instant case, Magistrate Judge Corley established a legal boundary on one end of the spectrum by ruling that simply having an Uber decal on one’s car does not make that person’s illegal acts within the scope of his or her work for Uber. However, scores of other plaintiffs have sued Uber over acts allegedly perpetrated while the wrongdoers were in the process of providing rides via the Uber platform, a fact pattern that is not addressed by Magistrate Judge Corley’s ruling but will certainly be raised by future cases.
Source:
Burnson, R. and Blumberg, P. (25 November 2019). Uber Defeats Rider Rape Suit Over Impostor’s Windshield Decal. Bloomberg
Uber News: Uber Loses London License Again After At Least 14,000 Rides Conducted By Drivers With Fake IDs
November 26, 2019
Author: Daniel Gala
Ride-sharing giant Uber has for a second time lost its ability to operate in London as local regulators questioned the company’s ability to operate safely in the jurisdiction following revelations that at least 14,000 Uber rides in the city were conducted by drivers operating under false identities.
Uber may still operate within the city as it appeals the decision by Transport for London [TfL] to the British courts. A temporary two-month permit to operate expired Monday, November 25, and the company has 21 days to appeal TfL’s decision not to issue it a new operating permit.
The rides were conducted under false identities by exploiting a flaw in Uber’s ride-sharing platform, which allowed drivers to improperly exchange photos with other drivers. A total of 43 drivers are believed to have exploited the flaw.
Uber claims that it has resolved the technical problems behind the false driver identities.
“We…put in place technical fixes so that it couldn’t happen again,” said Uber’s head of UK operations Jamie Heywood, according to Bloomberg. “The gap was closed. We stopped drivers implicated from taking new trips then did full audits of all the drivers in London.”
Uber CEO Dara Khosrowshahi also weighed in on Twitter.
“We understand we’re held to a high bar, as we should be,” he wrote November 25. “But this TfL decision is just wrong. Over the last 2 years we have fundamentally changed how we operate in London. We have come very far—and we will keep going, for the millions of drivers and riders who rely on us.”
London is one of Uber’s most important markets outside the United States. The company claims to have 3.5 million regular users in the region, along with about 45,000 drivers.
Representatives of those drivers condemned both Uber and TfL for failing to reach a reasonable accommodation, throwing the livelihood of tens of thousands of Uber drivers into turmoil through no fault of their own.
“[Uber drivers in London] now face the distress of facing not only unemployment but also crippling debt as they struggle to meet car lease payments,” James Farrar, chair of the United private Hire Drivers branch of the IWGB union, told Bloomberg. “The terrible price of Transport for London’s inability to run a stable regulatory regime and Uber’s refusal to play by the rules will be paid for by the most vulnerable workforce in London.”
Source:
Lanxon, N. (25 November 2019). Uber U.K. Chief Says It Fixed App Flaw Before London Ban. Bloomberg
Uber News: NJ Fines Uber $650M Over Driver Misclassification
November 25, 2019
Author: Daniel Gala
A New Jersey state agency has demanded $650 million in unpaid taxes and interest from ride-sharing giant Uber, saying the multibillion-dollar former startup shorted the state on millions in taxes by misclassifying its drivers as independent contractors rather than employees.
The total being sought by the New Jersey Department of Labor and Workforce Development includes $530 million in unpaid taxes for unemployment and disability insurance and nearly $120 million in interest. Covering the tax years 2014 through 2018, the action is believed to be the first effort by a state government to collect back taxes from Uber over alleged employment misclassification.
Uber was informed of the department’s assessment in a pair of letters, copies of which were obtained by Bloomberg Law via a public record’s request and first made public in a report published November 14.
Commissioner of the New Jersey Department of Labor and Workforce Development Roberto Asero-Angelo said in a statement that the assessment was part of New Jersey Governor Phil Murphy’s efforts aimed at “cracking down on employee misclassification.”
“For those who say properly enforcing our unemployment laws will stifle worker flexibility, let’s be clear: there is no reason temporary or on-demand workers can’t be treated like other employees who work flexible hours for short durations,” the statement read, as quoted by Bloomberg Law.
The move by New Jersey regulators is the latest in a series of increasingly aggressive actions taken by state and municipal governments to confront what they argue is the company’s skirting of local rules of local taxes. In California, following a state supreme court decision that adopted a new legal test for determining a worker’s employment status, state lawmakers codified the provision into law.
The new test, known as the ABC test, makes it more likely that so-called “gig economy” workers such as Uber drivers will qualify as employees, affording them a number of rights, such as minimum wage, overtime pay, and the ability to unionize that are not available to workers classified as independent contractors.
A form of the ABC test also has been adopted in New Jersey, where the implications of the government’s determination that Uber drivers are employees and not independent contractors is likely to have ramifications far beyond taxes.
“This would be life-changing for thousands of drivers, to know that they will be earning at least the minimum wage,” New York Taxi Workers Alliance founder Bhairavi Desai told Bloomberg Law. “The companies being required to pay into the unemployment insurance fund will mean that they can’t just toss drivers off the app.”
The change in employment classification also means companies like Uber could end up owing millions if not billions of dollars in additional payroll taxes and other costs, which is why the company has pushed back aggressively with a coordinated campaign that has included a full-saturation public relations blitz, high-priced political lobbying, and bare-knuckled litigation.
According to Bloomberg Intelligence, reclassifying its drivers as employees rather than independent contractors could cause Uber’s labor costs to increase by more than 20%. Some experts have placed their estimates even higher.
Uber has not been shy about the fact that it views the issue of worker classification as existential to the company’s multi-billion-dollar business model.
“It’s also no secret that a change in the employment classification of ride-share drivers would pose a risk to our businesses,” Uber CEO Dara Khosrowshahi said along with Lyft co-founders Logan Green and John Zimmer in a joint op-ed published June 12 in the San Francisco Chronicle.
With Uber already hemorrhaging billions of dollars in the aftermath of its highly vaunted yet highly disappointing IPO earlier this year, the company has been pushing back on the efforts of democratically elected governments to reign in some of the company’s more troubling practices. This strategy includes directly contesting the New Jersey tax assessment.
“We are challenging this preliminary but incorrect determination, because drivers are independent contractors in New Jersey and elsewhere,” Uber spokesperson Alix Anfang said, according to The New York Times, repeating the company’s long-stated but increasingly hollow talking point.
Sources:
Opfer, C. (14 November 2019). Uber Hit With $650 Million Employment Tax Bill in New Jersey. Bloomberg Law
Haag, M. and McGeehan, P. (14 November 2019). Uber Fined $649 Million for Saying Drivers Aren’t Employees. The New York Times
Khosrowshahi, D.; Green, L.; and Zimmer, J. (12 June 2019). Open Forum: Uber, Lyft ready to do our part for drivers. San Francisco Chronicle
Uber Lawsuit News: Uber Sued In Maine By Passenger Alleging Driver Sexually Assaulted Her
November 15, 2019
Author: Daniel Gala
In a legal action believed to be the first of its kind filed in the state, an anonymous Maine woman has sued the ride-sharing giant Uber alleging that she was sexually assaulted by one of the company’s drivers.
“Uber markets itself to women as a safe way to travel”, the woman’s attorney Douglas Mahoney said. “Unfortunately, many women around the country have found their rides to have been anything but safe. Uber needs to do a better job of protecting women passengers and making sure that they are not sexually assaulted by their drivers.”
The lawsuit stems from a November 2018 incident in which a 22-year-old female resident of Milford, Maine and two of her friends hailed an Uber to drive them home from a night club in Bridgeport. The alleged victim says that the Uber driver began commenting on her breasts before physically grabbing them three times before the passengers exited his vehicles. The driver’s actions were aggressive enough to cause one of the alleged victim’s piercings to begin bleeding.
Though the driver in question initially denied to police that he had touched the alleged victim’s breasts, he was charged in June with fourth-degree sexual assault, third-degree assault, and disorderly conduct. Under a program known as “accelerated rehabilitation,” the driver did not plead guilty to either of the assault charges and was instead placed on two years’ probation. If the driver maintains a clean criminal record for those two years, the charges will be dropped.
Though likely the first case of its kind brought in the state of Maine, lawsuits against Uber for the alleged improper actions of its drivers are hardly novel, with dozens of similar cases having been filed in other jurisdictions. Uber’s standard defense has been to argue that, because its drivers operate as independent contractors and not employees, the multi-billion dollar ride-sharing company is not responsible for their criminal acts.
The allegations have led to increasing scrutiny of Uber’s claims to place a priority on the safety of its passengers. Based on insider accounts, a September 26 report by the Washington Post examining Uber’s so-called Special Investigations Unit found that the unit’s policies and practices placed a greater emphasis on shielding the country from liability rather than helping alleged victims.
“The agents [of Uber’s Special Investigations Unit] are forbidden by Uber from routing allegations to police or from advising victims to seek legal counsel or make their own police reports, even when they get confessions of felonies, said Lilli Flores, a former investigator in Phoenix—a guideline corroborated in interviews with investigators, alleged victims and plaintiffs’ attorneys,” the Washington Post reported.
The Post further outlined instances of Uber even bending its own purported policies to keep potentially dangerous drivers on the road, providing private rides to vulnerable customers.
“Uber has a three-strikes system, investigators said, but executives have made exceptions to keep drivers on the road,” the Post reported. “For instance, a New York-area driver allegedly made three separate sexual advances on riders, said an investigator assigned to the case. After an executive overruled the investigator, the driver was allowed to continue working until a fourth incident, when a rider claimed he raped her.”
Further, an April 2018 report by CNN Money found that “at least 103 Uber drivers in the U.S. who have been accused of sexually assaulting or abusing their passengers in the past four years” preceding the report’s publication.
Sources:
Tepfer, D. (14 November 2019). Woman sues Uber after driver assaults her. CTPost
Bensinger, G. (26 September 2019). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. The Washington Post
O’Brien, S.A.; Black, N.; Devine, C.; and Griffin, D. (30 April 2018). CNN investigation: 103 Uber drivers accused of sexual assault or abuse. CNN Money
Uber Lawsuit News: ‘The Right To Accessible Transportation Is A Civil Right’: Pittsburgh Lawsuit Over Uber Disability Access To Proceed In Federal Court
November 15, 2019
Author: Daniel Gala
Despite efforts by ride-sharing giant Uber to force the case into binding arbitration, a US federal judge ruled November 12 that a lawsuit filed on behalf of disabled individuals who claim Uber fails to provide them with adequate access may proceed in federal court.
The lawsuit was filed in Pittsburgh, Pennsylvania on June 11 by the non-profit organization Disability Rights Advocates (DRA). Rather than seeking monetary damages, plaintiffs are urging the court to force changes to Uber policies with regards to providing wheelchair-accessible vehicles to those in need.
“Plaintiffs bring this action to remedy ongoing discrimination against persons with mobility disabilities who want to, but cannot, use the on-demand transportation service operated by Uber Technologies, Inc.,” the complaint reads.
DRA has brought similar lawsuits in California and New York.
“We filed this lawsuit to ensure that Uber and other ridesharing companies provide transportation that is accessible to all, including people with disabilities,” DRA staff attorney Melissa Riess and outside counsel R. Bruce Carlson said in a statement. “Facing a number of accessibility lawsuits around the country, Uber has repeatedly tried to prevent these claims from being heard in court to avoid their legal obligation to provide accessible transportation. This ruling reinforces that the right to accessible transportation is a civil right, and it cannot be denied to our clients or anyone else.”
In an effort to force the case into binding arbitration, where the proceedings would not be public and in which a private arbitrator would produce a decision without precedential value, Uber had pushed the “novel argument that people who have not downloaded Uber’s app or signed up to its terms of use could be forced into arbitration,” according to DRA.
However, the court ultimately “upheld the basic legal principle that someone cannot be bound by a contract they did not agree to,” per DRA.
In rejecting Uber’s arguments in favor of arbitration, the judge called the company’s efforts to bind individuals with which it has had no privity of contract to arbitration “meritless.”
According to a DRA statement issued at the time of the Pittsburgh lawsuit’s filing in June, “Uber fails to provide any wheelchair accessible vehicles through its on-demand ridesharing service in Pittsburgh.”
“Uber’s failure to make accessible vehicles available through its service denies people in Pittsburgh who use wheelchairs access to reliable, on-demand transportation that could drastically improve their lives, enabling them to travel to a wider variety of destinations without having to rely on transportation via expensive and unreliable taxis, unreliable paratransit, and limited public transit,” a DRA statement dated June 11 states. “It would enable them to travel spontaneously, without having to schedule transportation hours or even days in advance. Unfortunately, Plaintiffs and members of the class are excluded from these benefits, and suffer real harm as result.”
Sources:
United States District Court Western District of Pennsylvania. (Filed 11 June 2019). Class Action Complaint For Injunctive And Declaratory Relief For Violations Of The Americans With Disabilities Act, 42 U.S.C. 12101, et seq. Paul O’Hanlon, et al., v. Uber Technologies, Inc., et al
Disability Rights Advocates. (13 November 2019). Federal Court Rules That Civil Rights Claims Against Uber Must Be Heard In Court. Press Release
Disability Rights Advocates. (11 June 2019). O’Hanlon v. Uber Technologies, Inc. Press Release
Mericle, J. (14 November 2019). Pittsburghers who filed lawsuit against Uber will be heard in federal court. Pittsburgh Business Times
Uber Lawsuit News: Miami Woman Sues Uber, Says Driver Groped Her While She Was Pregnant
November 12, 2019
Author: Daniel Gala
In yet another allegation of sexual misconduct on the part of a driver operating for the ride-sharing giant Uber, a Miami woman has sued the company for negligence after an UberPool driver allegedly forcibly kissed her, groped her, and placed her hand onto his erection during an April 2017 ride home from a doctor’s appointment. The alleged victim claims she was pregnant at the time of the incident.
In May 2018, the driver pleaded guilty to aggravated battery of a pregnant woman and false imprisonment. In addition to Uber, the new civil suit also names the driver as a defendant, accusing him of assault, battery, and false imprisonment. The suit further claims that Uber was negligent in its screening and subsequent hiring of the driver.
“Her interpersonal relationships have suffered tremendously and her ability to lead a normal life is all but gone,” Hussein El Rashidy, an attorney for the alleged victim, told the Miami New Times. “All that being said, it appears that Uber could not care less about my client’s condition.”
Mirroring its legal strategy in similar cases, Uber has denied responsibility for the actions of its driver. Among other arguments, Uber has asserted that it never legally “hired” the driver, and bears less responsibility for his alleged conduct, because Uber classifies its drivers as independent contractors rather than employees.
However, this classification has been challenged in several class action lawsuits and thousands of arbitration demands filed on behalf of Uber drivers across the country. These drivers argue that they should be properly classified as employees, giving them the right to certain benefits such as overtime pay as well as the ability to unionize.
The Miami lawsuit, filed in Miami-Dade Circuit Court in October and reported by the Miami New Times on November 7, is just one of many allegations facing the ride-sharing giant over the alleged sexual and/or violent misconduct of its drivers. Plaintiffs have argued that, in its race to add new drivers and conquer new markets, Uber has conducted insufficient screening of its drivers to ensure it is placing its customers in safe hands. All the while, the company has marketed itself as a safe alternative to other forms of transportation.
Despite assurances from Uber that it has upgraded its platform to better ensure passenger safety, including new technology intended to alert Uber when a ride has gone unexpectedly off-route, the alleged victim says that, once they were alone in the car, her UberPool driver took a longer-than-necessary route to her destination and stopped several houses away from hers, where he allegedly proceeded to sexually assault her while trying to convince her to return to his house with him.
The fact that new lawsuits continue to be filed years after Uber and other ride-sharing companies have been alerted to the problem of passenger safety shows that, whatever measures they claim to be taking, they are highly inadequate.
Sources:
Cardona, A. (7 November 2019). Pregant Woman Says Miami Uber Driver Groped Her Breasts and Forcibly Kissed Her. Miami New Times
Uber News: ‘The System Design Did Not Include A Consideration For Jaywalking Pedestrians’: NTSB Releases Report On Fatal Crash With Uber Self-Driving Car
November 8, 2019
Author: Daniel Gala
In what amounts to another tragic reminder of the importance of diligent and experienced legal representation, the National Transportation Safety Board (NTSB) has released a preliminary report on its investigation into the fatal accident between an Uber self-driving car and a pedestrian that took place in Tempe, Arizona in 2016.
On March 18, 2016, 49-year-old Elaine Herzberg was walking her bicycle across a four-lane street when she was struck by a Volvo SUV that had been outfitted as an Uber autonomous test vehicle. The SUV was traveling 43.5 miles per hour at the time it struck Ms. Herzberg, who was remembered by those who knew her as being “like everyone’s aunt” and for having “such a big heart,” according to Reuters. Ms. Herzberg was struck with such impact that she was hurled approximately 75 feet.
The victim’s family reportedly settled with Uber just days after the deadly crash, which represented the first fatality on American roadways involving an autonomous test vehicle. While the terms of the settlement were not disclosed publicly, the NTSB preliminary report and accompanying documents contain new information indicating that the cause of the crash was related directly to Uber’s self-driving software, suggesting that the deceased victim’s family members may have been in a stronger negotiating position had they waited for the investigation’s results before signing away their right to sue.
“According to data obtained from the self-driving system, the system first registered radar and LIDAR observations of the pedestrian about 6 seconds before impact, when the vehicle was traveling at 43 mph,” the NTSB preliminary report states. “As the vehicle and pedestrian paths converged, the self-driving system software classified the pedestrian as an unknown object, as a vehicle, and then as a bicycle with varying expectations of future travel path.”
According to the NTSB, the difficulty Uber’s autonomous driving software had in identifying a pedestrian walking a bicycle can be traced directly to flaws in the software’s design.
“The system design did not include a consideration for jaywalking pedestrians,” says the NTSB’s Automation Report, as quoted by Wired
.
Additionally, the NTSB’s investigation has identified issues with Uber’s dedication to safety, noting problems with the company’s internal structure. For example, Uber’s self-driving program lacked either a safety manager or a division dedicated to operational safety.
Had Herzberg’s heirs waited for the NTSB’s findings to be released prior to settling their claims against Uber, they likely could have used the additional revelations as extra leverage in negotiating more favorable terms, or even used the NTSB report as evidence against Uber at trial.
Not only would such a tactic potentially have resulted in a larger settlement for the plaintiffs, it also could have had a stronger impact in terms of holding Uber and other testers of autonomous vehicles accountable for injuries caused by what amount to private experiments conducted on public roadways.
However, the attorney that Herzberg’s husband and daughter hired to represent them reportedly lacked specialization in either vehicular accidents or wrongful death, instead focusing primarily on bankruptcy and debt negotiation. This means she may have lacked the expertise necessary to get her clients, and their deceased loved one, the full extent of the justice they deserved.
Sadly, it serves as another remember of the importance of having on your side a diligent attorney with extensive experience obtaining justice for clients facing issues just like yours. With Ms. Herzberg also reportedly having been a woman who lacked permanent shelter, the tragedy of her death also highlights the importance of all people having access to adequate legal representation, regardless of their ability to pay upfront.
Sources:
National Transportation Safety Board (NTSB). (Undated). Preliminary Report Highway HWY18MH010. Investigations. Accident Reports
Loizos, C. (29 March 2019). Uber has settled with the family of the homeless victim killed last week. Tech Crunch
Marshall, A. and Davies, A. (5 November 2019). Uber’s Self-Driving Car Didn’t Know Pedestrians Could Jaywalk. Wired
Somerville, H. (20 March 2018). Homeless Arizona woman killed by Uber self-driving SUV was ‘like everyone’s aunt’. Reuters
Uber Lawsuit News: Uber Expects To Pay Up To $170M Over Driver Misclassification Claims, Filing Says
November 7, 2019
Author: Daniel Gala
Coming off a record $5 billion loss in the second quarter of 2019, much of the media attention surrounding the third-quarter financial disclosures for ride-sharing giant Uber no doubt will focus on the company’s bottom line. However, buried deep in the notes to Uber’s Form 10-Q, the company updates regulators and investors on the status of the most potentially consequential of the many legal actions facing the notoriously litigious former startup.
Among the details hidden deep in the Commitments & Contingencies of Uber’s filing for the quarter ended September 30 is the fact that the company anticipates spending as much as $170 million to settle arbitration demands brought by drivers alleging the company has misclassified them as independent contractors rather than employees. The $170 million figure includes $142 million the company says it already had paid out as of September 30.
“In May 2019, the Company reached agreements to resolve independent contractor misclassification claims of Drivers in California and Massachusetts that have filed (or expressed an intent to file) arbitration demands,” Uber’s Form 10-Q, filed November 5, states. “Under the agreements, certain Drivers are eligible for settlement payments, subject to a threshold number of Drivers entering into individual settlement agreements. The Company anticipates the aggregate amount of payments to Drivers under the individual settlement agreements, together with attorneys’ fees, will fall within an approximate range of $146 million to $170 million, of which approximately $142 million has been paid as of September 30, 2019.”
Uber did not disclose the estimated number of drivers expected to participate in the settlement program, which included only drivers located in California and Massachusetts. Prior court decisions upholding an optional arbitration agreement that Uber offers new drivers upon joining the company led to a bifurcated legal process in which drivers who had opted out of the arbitration agreement were able to join class-action lawsuits, while those drivers covered by the agreement were compelled to seek compensation through arbitration.
The move by attorneys representing Uber drivers to essentially “call the bluff” of Uber by flooding the company with thousands of arbitration demands has been seen by some observers as a direct challenge to a policy prevalent among many large companies, which is to compel arbitration wherever possible. This tactic deprives potential plaintiffs of the ability to band together by joining class-action lawsuits or to challenge the company in state or federal court, where the issues involved typically are addressed in public view. Additionally, unlike court decisions, the rulings of professional arbitrators lack any precedential value, eliminating the risk that a company will receive a ruling that, in turn, will negatively impact the company’s prospects in future cases.
Two putative class-action lawsuits brought on behalf of drivers located in California and Massachusetts, which ultimately included only drivers who had opted out of Uber’s arbitration agreement, previously had settled for $20 million, according to Uber’s filing.
Given the non-public and largely individual nature of these arbitration proceedings, the total sum paid out by Uber otherwise would be difficult to ascertain without access to Uber’s internal finances. The disclosure represents just one of the many new pieces of information the company has been forced to reveal publicly since issuing the prospectus for its highly-publicized yet highly-disappointing May IPO.
Unfortunately for Uber, many of these newly mandated disclosures have shed the company, its business model, and its business practices, in a less-than-flattering light, leading to the public shellacking Uber’s stock has taken in the months since the company went public.
Source:
Uber Technologies, Inc. (Filed 5 November 2019). Form 10-Q for the quarterly period ended September 30, 2019. Notes to Financial Statements. Note 15 – Commitments and Contingencies. O’Connor, et al., v. Uber Technologies, Inc. and Yucesoy v. Uber Technologies, Inc., et al
Uber Lawsuit News: Class Action Says Uber Cheated Thousands Of New York Drivers For Years
November 7, 2019
Author: Daniel Gala
Ride-sharing giant Uber for years cheated nearly 100,000 New York City-based drivers out of wages they were owed contractually, a new class action lawsuit filed Wednesday, November 5 alleges.
The lawsuit, brought by the New York Taxi Workers Alliance, claims that Uber improperly deducted from drivers’ earnings taxes and other charges that are supposed to be paid by customers, not workers. These costs, which included a state sales tax and a surcharge for a contribution to the state worker’s compensation fund, were imposed on drivers in addition to Uber’s own service, which ranged from 20% to 28%, according to the suit.
The New York Taxi Workers Alliance further alleges that Uber violated its contract with drivers from 2016 through May 2017, during which time it had revised its cost structure for rides but failed to make corresponding updates to its agreement with drivers. The result, the lawsuit claims, was that Uber drivers were cheated out of wages during the interim period.
The lawsuit, reported by the New York Daily News, comes just days after a judge tossed out a separate case brought by Uber, which had urged the court to overturn new city rules that place further restrictions on high-volume ride-for-hire operators in lower Manhattan.
The new class action lawsuit represents just the latest in a seemingly unending series of legal challenges facing the company, which has become infamous for its ask-forgiveness-later-rather-than-permission-first approach to entering new markets. Increasingly, courts and state legislatures have challenged Uber’s interpretation of employment laws, specifically with regards to the company’s classifying its millions of drivers as independent contractors rather than employees.
Sources:
Guse, C. (6 November 2019). Uber for years shortchanged nearly 100,000 drivers: lawsuit. New York Daily News
Stempel, J. (1 November 2019). Judge dismisses Uber lawsuit opposing New York City vehicle licensing caps. Reuters
Uber Lawsuit News: Judge Tosses Uber Lawsuit Opposing NYC Ride-Share Rules
November 3, 2019
Author: Daniel Gala
Efforts by ride-sharing giant Uber to have a court overturn New York City’s limit on the number of new for-hire vehicles operating on its roadways have been rebuffed, with a state-court judge dismissing Uber’s lawsuit challenging the regulation in an order signed October 28.
New York City’s Local Law 147
At issue is New York City’s Local Law 147 of 2018, which was signed into law by Mayor Bill de Blasio on August 14, 2018. The law takes a number of measures to address the influx of ride-sharing vehicles flooding the city’s roadways, including “freezing new For-Hire Vehicle (FHV) licenses for a year and instructing the New York City Taxi and Limousine Commission (TLC) and Department of Transportation (DOT) to study the impact of the FHV sector on traffic congestion,” in the words of the TLC’s notice of promulgation.
Additionally, Local Law 147 of 2018 “authorizes the TLC to establish vehicle utilization standards, or as they are referred to in the rules ‘caps on cruising,’ for FHVs dispatched by the High-Volume For-Hire Services (HVs) and mandates that the TLC periodically review the number of FHV licenses.”
The law requires the TLC to change its rules in order achieve certain targets, include the goal to “[d]ecrease the percentage of time that FHVs dispatched by HVs spend cruising (driving or waiting without a passenger) in Manhattan south of 96th Street by capping it at 31% during the most congested times of day.”
The City’s Motion To Dismiss, Granted
In a seven-page decision for the Supreme Court of New York County, Judge Lyle E. Frank roundly rejected Uber’s contentions that the local ride-sharing rules represented an impermissible delegation of the city’s legislative authority to the TLC and that the local regulations are preempted by applicable state law.
Judge Frank’s decision makes short work of Uber’s delegation argument, finding Local Law 147 of 2018 to be well within the bounds established by precedent.
“What the plaintiffs are asking is for the judiciary to strike down an act of the legislature in that it gives too much power to the executive,” Judge Frank writes, framing the issue in terms of separation of powers. “The Court declines to strike down this statute due to impermissible delegation for the reasons indicated below.”
Among the reasons cited, Judge Frank finds that “many delegations with far fewer specifics have been found to be permissible” including a 2015 case “where the Court of Appeals upheld New York City Taxi and Limousine Commission (‘TLC’) rules specifying a single vehicle model that must be used by all medallion taxicab licensees (with certain exceptions).”
Additionally, the court notes that the initial cap on FHV licensees was voted on by the legislature, which in this case is the New York City Council.
Judge Frank found equally uncompelling Uber’s argument that Local Law 147 of 2018 should be found invalid because it is preempted by relevant state law, stating flatly, “As to the state preemption argument, the Court is simply not persuaded that any state laws act to preempt Local Law 147.”
While leaving open the possibility that future acts of the TLC pursuant to Local Law 147 could run afoul of a state tax law, Judge Frank found no such conflicts to date.
Conclusion
The elected officials and subject-matter experts of New York City developed and passed Local Law 147 of 2018 in order to help address the impact ride-sharing vehicles are having on already-strained roadways, adding to the nightmarish congestion experienced in many cities on a daily basis. While Uber has sought to circumvent local leaders by having ride-sharing restrictions overturned in court, Judge Frank’s order dismissing Uber’s challenge to Local Law 147 represents a victory for local control over local roadways.
“Traffic congestion in New York City has grown steadily worse since 2010, with travel speeds in Midtown Manhattan dropping to 4.3 mph during November and December of 2018,” states the TLC’s notice of promulgation. “While the increase in traffic congestion has many sources, including growth in population, employment, commerce, and construction activity, traffic counts collected by the DOT in the fall of 2018 found that FHVs, the overwhelming majority of which are dispatched by HVs, make up 30% of the peak period vehicle volumes in Manhattan south of 96th street.”
With ride-sharing vehicles being operated by drivers for Uber and other high-volume dispatchers accounting for almost a third of rush-hour congestion in southern Manhattan, Judge Frank’s decision clears the way for the TLC to use the tools provided by Local Law 147 to help alleviate the city’s infamous traffic, which has, at times, been reduced to near-walking speed.
Source:
Supreme Court of the State of New York New York County. (Filed 31 October 2019; Signed 28 October 2019). Decision + Order On Motion. Index No. 151730/2019. Uber Technologies Inc. et al, v. The City Of New York et al
New York City Taxi and Limousine Commission (TLC). (Undated). Notice of Promulgation. Local Law 147 of 2018
Uber Lawsuit News: Uber’s Good Cop/Bad Cop: Urging Cooperation With Lawmakers While Suing Municipalities
November 1, 2019
Author: Daniel Gala
In a move that threatens plans to impose a significant ride-sharing-tax increase in the city of Chicago, Uber has filed a lawsuit against the village of Skokie, Illinois, challenging a local tax Uber says is unconstitutional under Illinois law.
Meanwhile, in a two-faced routine employed in jurisdictions around the world, Uber also has been voicing a willingness to collaborate with state lawmakers to develop a statewide regulatory regime that would supersede, and consequently nullify, ongoing efforts by local leaders to control ride-sharing operations within their communities.
In May, the village of Skokie, population 65,000, passed an ordinance imposing a modest tax on rides that either begin or end within its borders. City leaders justified the tax as compensation for the companies’ use of public services, including wear and tear on the village’s roadways.
Uber has argued that local ride-share taxes violate Illinois state law because they apply to rides that take place, at least in part, outside the village’s borders.
Skokie’s tax imposes an additional fee of 35 cents on solo rides and 15 cents on shared rides that begin or end within the village.
As it sues local municipalities, Uber has expressed a willingness to work with state lawmakers to craft statewide rules “that raise revenue in a way that makes sense for the state and the industry,” as quoted by Reuters.
Some observers view Uber’s lawsuit against Skokie, Illinois as a thinly veiled challenge to plans put forth by Chicago Mayor Lori Lightfoot, which would raise an estimated $40 million in revenue for the city by imposing new and increased ride-sharing taxes. Mayor Lightfoot’s plan includes implementing a new $1.75 surcharge on downtown rides during rush hour and increasing an existing single-passenger per ride tax from 60 cents to $1.13 per ride.
“Our belief is that the Illinois Constitution forbids any municipality in the state from imposing occupational, extraterritorial, or arbitrary taxes,” an Uber spokesperson said, according to Curbed Chicago, adding revealingly, “A positive ruling [for Uber] in this case would likely impact Chicago.”
Meanwhile, the office of Chicago’s Mayor Lightfoot expressed confidence in the city’s authority to impose the fees outlined in the mayor’s plan, which are part of an effort to close a budget deficit of more than $800 million.
“The new measures proposed by the mayor are simply a modification of the ground transportation tax that has been in place for decades and has applied to rideshare operations since they were first allowed in 2014,” a statement released by the mayor’s office said, as quoted by Curbed Chicago. “Chicago absolutely has the authority to tax rideshare companies, just as it has the authority with taxis and limos. We are confident that a company like Uber has the ability to adapt and comply.”
Sources:
Reuters. (30 October 2019). Uber takes aim at ‘patchwork’ of ride share taxes in Illinois
Freund, S. (30 October 2019). Uber’s lawsuit over fees in Skokie may foreshadow struggle in Chicago. Curbed Chicago
Uber Lawsuit News: Uber Sues City of LA Over Data Access As Legal Battles Extend To Scooters
November 1, 2019
Author: Daniel Gala
It's as if ride-sharing giant Uber just can't help but pick every possible legal fight that comes its way. The latest front to open in the embattled company's court wars involves Uber's foray into the trendy electric scooter market, with the company suing the City of Los Angeles to prevent the municipality from gaining access to real-time location data for the thousands of scooters it operates within the city, as is required under local rules.
The lawsuit, reportedly filed Monday, October 28, stems from the Los Angeles Department of Transportation's [LADOT] September 2018 mandate that all scooter companies operating within the city provide regulators with location data for their scooters. The requirement is known as the "Mobility Data Specification" plan.
Proponents argue that the plan, which has been a model for similar plans implemented in other cities dealing with the sudden influx of traffic due to ride sharing and rental scooters, gives city officials access to the information they need to better understand the scooters' impact on the city's traffic flows and to make the necessary adjustments.
"LADOT has the responsibility to manage the public right-of-way, ensuring safety and access for everyone," read a statement issued by LADOT. "To be effective, the department requires reasonable information about the tens of thousands of shared vehicles operated by transportation technology companies that use our streets for profit."
LADOT also said that Uber is the lone holdout in refusing to provide scooter location data, with all other permitted companies being in compliance. As a a result , Uber faces potential suspension of its license to operate shared scooters within Los Angeles.
"While all other permitted scooter and bike companies are complying with our rules, Uber has repeatedly refused," the statement continued. "L.A.'s requirements have been clear since last November, and Uber agreed to abide by them. By 5 pm tomorrow, we expect Uber to come into compliance or they will face suspension proceedings, which could eventually lead to revocation of their permit."
However, Uber argues that handing over such data to local governments presents privacy concerns and violates California's Electronic Communications Privacy Act.
"Independent privacy experts have clearly and repeatedly asserted that a customer's geolocation is personally identifiable information and--consistent with a recent legal opinion by the California legislative counsel--we believe that LADOT's requirements to share sensitive on-trip data compromises our customer's expectations of data privacy and security," said an Uber spokesperson, per CNET. "Therefore, we had no choice but to pursue a legal challenge, and we sincerely hope to arrive at a solution that allows us to provide reasonable data and work constructively with the City of Los Angeles while protecting the privacy of our riders."
Source:
Ng, A. (28 October 2019). Uber sues Los Angeles to keep scooter location data private. CNET
Uber News: After Task Force Report, NJ Labor Regulators Auditing Uber For Potential Misclassification Of Drivers
October 21, 2019
Author: Daniel Gala
The New Jersey Department of Labor and Workforce Development has opened an audit into ride-sharing giant Uber’s potential misclassification of its drivers as independent contractors rather than employees, Bloomberg Law reported October 17. As part of the audit, the department has mailed occupational surveys to Uber drivers statewide.
“The following information is needed to determine if your relationship with the company was that of an independent subcontractor or an employee for unemployment insurance,” a driver survey obtained by Bloomberg Law stated in part.
In July, a task force convened by New Jersey Governor Phil Murphy issued a report on employee misclassification in the state. The report found that employee misclassification, defined as “the practice of illegally and improperly classifying workers as independent contractors, rather than employees”, hurts law-abiding businesses, workers, and the state to the tune of millions if not billions of dollars.
“Such misclassification deprives workers of a suite of rights guaranteed to employees, but not independent contractors, including the right to earn overtime for working in excess of 40 hours per week; to receive workers’ compensation benefits if injured on the job; to receive unemployment benefits; to receive earned sick leave; to take job-protected family leave and receive family leave benefits; to receive health and safety protections, as well as protections under state and federal anti-discrimination laws; and to organize under the National Labor Relations Act,” the report found.
Additionally, “[m]isclassification not only hurts workers and law-abiding business, it also hurts the state.” The report cites a 2000 US Department of Labor study that found “the failure to properly classify construction employees resulted in state income taxes not being paid for up to $11 million in off-the-books employment and nearly $9 million for employment of misclassified workers.” Further, “the State lost an estimated $3.1 to $6.7 million in foregone unemployment insurance payments in the same year.”
And the problem has only gotten worse since then. According to the Governor’s task force, employee misclassification “has increased by approximately 40% in the last ten years, and is a growing problem in New Jersey (and other states).”
A more recent study by the US Department of Labor bears this out.
“In 2018, the DOL’s Employer Accounts section (“DOL EA”) found that 12,315 workers were misclassified, $462,058,602.55 in wages were underreported, and $13,911,968.34 in contributions (unemployment, disability, family leave insurance, and workforce) were underreported,” the New Jersey report states. “DOL EA is required to annually audit just 1% of all registered New Jersey employers, implying that the true costs of misclassification are much greater.”
In such an environment, it is unsurprising that the New Jersey Department of Labor and Workforce Development has initiated an audit of ride-sharing workers’ employment records, opening another front in the many legal battles threatening the feasibility of Uber’s business model. In the employee classification arena alone, the ride-sharing giant already faces thousands of lawsuits and arbitration actions filed on behalf of drivers challenging their employment status, as well as actions by state and federal lawmakers to curtail Uber’s driver classification practices.
Source:
Bloomberg Law. Uber, Lyft Being Probed in New Jersey on Misclassifying Drivers
Report of Gov. Murphy’s Task Force on Employee Misclassification. (July 2019)
Uber News: Uber CEO A No-Show At Hearing As House Lawmakers Promise Ride-Sharing Regulation
October 17, 2019
Author: Daniel Gala
The CEO for ride-sharing giant Uber has refused an invitation from a US House of Representatives committee to participate in hearings held October 16 to address several issues plaguing the ride-sharing industry, according to a firmly worded letter from the committee chairman. Meanwhile, in the letter and at the subsequent hearing, lawmakers promised that the days of ride-sharing companies like Uber going relatively unregulated would soon be over.
“News reports in recent weeks have raised serious questions about a wide range of issues including sexual predation by drivers, the need for background checks and deactivation of dangerous drivers, and inadequate wages,” states the October 14 letter from Chairman of the House Committee on Transportation and Infrastructure Rep. Peter A. DeFazio to Uber CEO Dara Khosrowshahi. “Only a direct Uber representative is capable of answering direct questions that the 56 Members of the Subcommittee will have about Uber’s policies on these and a range of other issues.”
The hearing before the House Subcommittee on Highways and Transit, entitled “Examine the Future of Transportation Network Companies: Challenges and Opportunities,” was held at 11:00 am on October 16 without the participation of either Uber CEO Khosrowshahi or Lyft CEO Logan Green, who also received a letter from the subcommittee chair.
Subcommittee Chair DeFazio, an Oregon Democrat, warned both ride-sharing competitors that their industry was overdue for regulatory action and that by refusing to address the lawmakers directly—instead having “suggested that [the subcommittee] invite third party industry associations to generally talk about technology innovation in transportation”—the companies risk losing their opportunity to participate in the policymaking process.
“Please be advised that I intend to pursue legislative solutions to address numerous issues plaguing the ride hailing industry, many of which will be raised at this hearing,” the letters to both CEOs warn. “These include conditions governing your partnerships with States and local governments and transit agencies, the labor impacts of your business model, and disturbing reports of public safety problems among those who use your platform. If you do not send a representative to testify at the hearing, you leave the Committee little choice but to make these policy decisions without your input.”
In opening remarks for the October 16 hearing, Committee Chairman DeFazio continued his attacks on the ride-sharing industry, implying they had skated by in an under-regulated new marketplace while exacerbating a host of serious problems ailing our society.
“The transportation landscape in many cities has been upended by transportation network companies (TNCs),” read prepared opening remarks for House Committee on Transportation and Infrastructure Chairman Defazio and Subcommittee on Highways and Transit Chairwoman Eleanore Holmes Norton. “Companies—led by Uber and Lyft—that have developed transformative technology platforms connecting riders and drivers that have revolutionized how we travel.”
However, the chairpersons say, this revolution has placed a considerable burden on our environment and infrastructure, not to mention the companies’ own drivers.
“The impacts of TNCs on traffic congestion are significant,” the chairs’ prepared remarks continue. “Consider San Francisco where the very first Uber ride was take in 2010: in just six years, traffic delays increased by a total of 40,000 hours while vehicle miles traveled increased by 630,000 miles. Half of these increases have been attributed to the rise of TNCs. Despite common misconceptions that ride hailing ameliorates traffic, studies how private and even shared TNC rides add more congestion and more emissions, not less.”
The increased attention from lawmakers comes as Uber already faces serious legal challenges on a number of fronts, from investor lawsuits to cases filed by alleged victims of sexual misconduct and violence on the part of Uber drivers to thousands of legal actions brought on behalf of Uber drivers challenging their employment classification. In their prepared remarks, the chairpersons were not shy about the circumstances all adding up to an existential threat to the ride-sharing giants' business model.
“Uber posted more than $5 billion in losses in the second quarter of 2019, while Lyft reported $650 million in losses - despite paying low wages and pushing all vehicle costs off on drivers and hiring just about anyone they can find,” the statement says. “Clearly, this business model is not sustainable.”
Sources:
United States House of Representatives Committee on Transportation and Infrastructure Subcommittee on Highways and Transit. (14 October 2019). Letter to Uber CEO Dara Khosrowshahi
United States House of Representatives Committee on Transportation and Infrastructure Subcommittee on Highways and Transit. (14 October 2019). Letter to Lyft CEO Logan Green
United States House of Representatives Committee on Transportation and Infrastructure Subcommittee on Highways and Transit. (14 October 2019). Chair DeFazio Urges Uber, Lyft to Reconsider Participation at Upcoming Hearing on Serious Issues Facing the Ride Hailing Industry. Press Releases
United States House of Representatives Committee on Transportation and Infrastructure Subcommittee on Highways and Transit. (16 October 2019). Chairs DeFazio, Norton Statements from Hearing on Future of Transportation Network Companies. Press Releases
Uber News: Already On Temporary License Over Safety Concerns, Uber Sees London Driver Convicted Of Sexual Assault
October 15, 2019
Author: Daniel Gala
Already operating on a temporary permit after its permanent license to operate in the city of London was revoked in 2017 over safety concerns, Uber was dealt another blow—and victims of sexual violence earned a victory—with the conviction of an Uber driver for sexually assaulting a passenger in 2018, Bloomberg reported October 15.
The incident in question took place in the early morning hours of January 15, 2018, when a 27-year-old woman in a condition described as “extremely vulnerable” hailed an Uber to drive her home. However, after picking the woman up in his vehicle, Uber driver Temur Shah sexually assaulted her before dropping her off at her destination.
In addition to criminal action faced by its drivers, Uber itself has faced a number of lawsuits in the United States filed by alleged victims seeking to hold Uber accountable for acts perpetrated by its drivers. According to Bloomberg, Uber faced a class action lawsuit filed on behalf of alleged victims of sexual assault claimed to have been perpetrated by Uber drivers, which the company reportedly settled confidentially prior to its highly anticipated and highly disappointing IPO earlier this year.
The accusations of sexual misconduct and other violent acts perpetrated by Uber drivers comes amidst growing scrutiny of the embattled ride-sharing giant’s commitment to passenger safety. In September, The Washington Post published a highly critical exposé of Uber’s so-called Special Investigations Unit, reporting that Uber trained its “investigators” to put shielding the company from liability before seeking justice for alleged victims. Unit policies forbid Uber “investigators” from suggesting that victims report their allegations to police or from recommending that victims obtain an attorney.
Similarly, just days after the Post exposé, the Eugene Register-Guard reported that police in Eugene, Oregon, who run their own background checks on locally licensed drivers to supplement checks said to be performed by Uber, had identified several drivers with serious criminal histories that Uber had missed. The records overlooked by Uber included one driver who was a registered sex offender and another who had been convicted of murder.
Tragically, particularly given Uber’s apparent lack of urgent action, sexual assaults and other violent acts perpetrated by Uber drivers against their own passengers and third parties are hardly anything new. An April 2018 investigation by CNN Money found that at least 103 Uber drivers had been accused of sexually assaulting or sexually abusing their passengers in the preceding four years.
Uber will almost certainly face difficult questions about its safety record when it seeks to renew its temporary operating permit for London in November.
Source:
Spence, E. (15 October 2019). London Uber Driver Convicted of Sex Assault on Passenger. Bloomberg
Bensinger, G. (26 September). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. The Washington Post
Hill, C. (29 September 2019). Eugene Police: Uber, Lyft driver background checks have holes. The Eugene Register-Guard
O’Brien, S. et al. (30 April 2018). CNN investigation: 103 Uber drivers accused of sexual assault or abuse. CNN Money
Uber Lawsuit News: Uber Driver Found Not Guilty In Passenger Killing, Victim’s Family Sues Uber For Wrongful Death
October 12, 2019
Author: Daniel Gala
Just hours after an Uber driver was found not guilty of first-degree murder in the shooting of a passenger, the victim’s family announced it would be suing the ride-sharing giant for wrongful death, alleging the company failed to enforce its policy of not allowing drivers to keep a gun in the car.
Jurors deliberated for parts of two days before delivering their verdict Thursday, October 10.
The legal action stems from a June 2018 incident in which 45-year-old passenger Hyun Kim was shot and killed by his Uber driver, 31-year-old Michael Hancock. Hancock allegedly pulled his vehicle over and shot at Kim in the rear seat from outside the vehicle, firing ten bullets, six of which struck Kim.
At trial, Hancock argued that his actions had been performed in self-defense, claiming that Kim, who was found to have a blood-alcohol level more than three times the legal limit, had engaged in unwanted sexual advances before attacking Hancock.
Prosecutors had sought to depict Hancock as being guilty of first-degree premeditated murder, saying he had time to contemplate what he was doing as he exited the vehicle to shoot Kim from outside the stopped car.
Records show that Hancock failed to drop Kim off at his intended destination and instead proceeded to drive an additional 70 miles with Kim in the vehicle before the shooting occurred.
“This was a hard case and while we respect the jury’s decision, we are disappointed in the outcome,” the Denver District Attorney’s Office said in a statement.
The defendant Hancock had been represented by Denver-area public defenders.
“On behalf of the Hancock family, they would like to say this has been a tragedy for both families, that their prayers remain with the Kim family, and that the family has asked that the public and media respect their privacy moving forward, so that they can process what has happened,” public defender Johnna Stuart told ABC Denver7.
The wrongful death lawsuit represents just the latest legal action against the ride-sharing giant Uber over alleged violent acts and/or sexual misconduct on the part of its drivers. In late September, the Washington Post published an exposé reporting that, based on interviews with numerous former employees, that Uber’s so-called Special Investigations Unit is aimed more at absolving the company from potential liability than in protecting passengers and obtaining justice for victims.
“Investigators are there first to protect Uber; and then next to protect the customer,” former Uber investigator Lilli Flores told the Post.
With Uber apparently steadfast in its policy of placing company profits over rider safety, lawsuits such as the wrongful death claim filed by Kim’s family represent one of the few areas of recourse left to victims and their loved ones.
Sources:
Miller, B. And Hernandez, L. (10 October 2019). Denver Uber driver found not guilty of first-degree murder in passenger’s 2018 killing. ABC Denver7
Johnson, D., Lizarraga, L., and Hendee, C. (8 October 2019). Uber driver accused of killing passenger found not guilty; Victim’s family to pursue civil lawsuit. NBC News 9
Bensinger, G. (26 September). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. The Washington Post
Uber Lawsuit News: ‘A Pattern Of Negligence’: Uber Faces Lawsuit After Driver Strikes 73-Year-Old Woman
October 12, 2019
Author: Daniel Gala
A 73-year-old Chicago woman who was struck by a car operated by an Uber driver while crossing the street has sued the ride-sharing giant amid what her attorney describes as “a pattern of negligence of being distracted, maybe rushing to more pickups” on the part of Uber drivers in the city, WBBM Newsradio reported October 3.
“Mary is in the crosswalk when she begins to cross,” said Patrick Murphy, attorney for plaintiff Mary McKeever, describing the incident. “The Uber driver is coming east on Schubert, makes the left turn to go north on Clark and just runs right into her—right smack in the middle of the crosswalk.”
After being struck, McKeever allegedly traveled roughly 10 yards on the hood of the Uber driver’s car before falling off.
While an eyewitness reported seeing McKeever crossing mid-block and not in a crosswalk, McKeever’s attorney Murphy said that videotape evidence shows that she was crossing at a crosswalk.
“State law says this is her safe haven; she has the right to cross and motorists have to yield,” Murphy told WBBM.
While declining to comment on the incident itself, Uber expressed sympathy for McKeever.
“Our thoughts are with the woman who was injured and we hope she makes a full recovery,” an Uber spokesperson said. “We stand ready to work with authorities to assist in their investigation.”
The lawsuit is just the latest of thousands of pending cases and arbitration actions filed against ride-sharing giant Uber, with plaintiffs ranging from accident victims like McKeever to alleged victims of violence and sexual misconduct perpetrated by Uber drivers to Uber investors who allege the company misled them to Uber drivers challenging their employment status.
Even for McKeever’s lawyer Patrick Murphy, this is not his first case against Uber.
“There is a sort of pattern,” he said.
Source:
WBBM Newsradio. (3 October 2019). Lawsuit Accuses Uber Driver Of Striking Pedestrian In Crosswalk
Uber News: Family Of Man Murdered By Uber Eats Driver Sues Uber
October 9, 2019
Author: Daniel Gala
The family of a man who was shot and killed by the Uber Eats driver delivering his food has sued the transportation company Uber, alleging that the company should have barred the driver from working due to his violent criminal record, the Atlanta Journal-Constitution reported October 3. The lawsuit is just the latest of dozens filed against ride-sharing giant Uber seeking to hold the company liable for violent acts and other criminal behavior perpetrated by its drivers, often against their own customers.
In February 2018, 30-year-old Ryan Thornton was murdered by Uber Eats driver Robert Bivines while Bivines was delivering Thornton’s order. In November 2018, Bivines was convicted of malice murder, felony murder, aggravated assault, and possession of a weapon during commission of a felony, for which he was sentenced to life in prison plus five years.
Now, Thornton’s family has filed a civil lawsuit against Uber Eats’ parent company Uber, alleging that Uber failed to adequately protect its customers by engaging in thorough screening of its workers. In the case of Bivines, Atlanta’s Channel 2 reported that, roughly eight years prior, Bivines had been charged with aggravated assault and later convicted of the lesser charge of battery.
“[The now-convicted murderer Bivines] was qualified to drive [for Uber] because [the conviction] was seven years and seven months prior,” said Rod Dixon, attorney for the family of the victim Thornton, per the Journal-Constitution. “It doesn’t make sense. We’re talking about drivers who are going to people’s homes.”
According to Dixon, Uber allows violent criminals to work as drivers as long as seven years have passed since their conviction, meaning Bivines had just become eligible to drive by a matter of months at the time he shot and killed Thornton.
Thornton’s mother, Marcene Thornton, has said her son advocated the Uber Eats service to her, but she had expressed skepticism.
“It’s the last thing I said to my child,” Thornton recalled, according to the Journal-Constitution. “I don’t want anybody coming to my house with my food. I’ll get my own food.”
While lawsuits filed over the alleged misdeeds of Uber Eats drivers have been more rare, Uber has faced a slew of lawsuits filed by alleged victims of violence and sexual misconduct on the part of Uber drivers. Tragically, the occurrence appears to be fairly widespread and to have been ongoing for years. A 2018 investigation by CNN found that at least 103 Uber drivers had been accused of sexual assault or abuse in the previous four years.
A review of recent headlines suggests the problem is far from solved and may even be getting worse, as Uber continues its breakneck push to add new drivers and conquer new territories.
On October 1, a Denver-based jury heard opening arguments in the case of an Uber driver charged with first-degree murder for alleging shooting his passenger to death, and, on September 27, a North-Carolina-based Uber driver was arrested for allegedly kidnapping and sexually assaulting a female passenger.
Meanwhile, Uber has faced growing scrutiny that it is not taking the threat to its passengers’ safety seriously enough. A September 26 exposé by the The Washington Post examined Uber’s Special Investigations Unit, revealing, based on interviews with numerous former Uber investigators, that they were trained primarily to shield Uber from liability rather than help alleged victims. Specifically, former trainers say they were instructed not to tell alleged victims to report their incidents to police, and that Uber does not report any incidents to its ride-sharing competitors or national background-reporting agencies.
Sadly, the case of victim Ryan Thornton is just another in a long list of potentially preventable tragedies perpetrated by Uber drivers.
Sources:
Abusaid, S. (3 October 2019). Family of man shot, killed by Uber Eats driver files lawsuit. Atlanta Journal-Constitution
Slevin, C. (1 October 2019). Lawyer: Uber driver killed passenger in self-defense. Associated Press
Associated Press. (30 September 2019). Uber driver charged with kidnapping, assaulting passenger
Bensinger, G. (26 September 2019). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. The Washington Post
Uber News: North Carolina Uber Driver Arrested For Alleged Kidnapping, Rape Of Passenger
October 2, 2019
Author: Daniel Gala
Police in Kernersville, North Carolina arrested a 39-year-old male Uber driver Friday, September 27, jailing him on charges that he allegedly kidnapped and then raped a female passenger during a June incident. The arrest marks the latest in a string of allegations of violence and sexual misconduct claimed to have been perpetrated by Uber drivers against their own passengers and comes amidst the fallout from a bombshell Washington Post report that found Uber’s so-called Special Investigations Unit has been primarily focused on shielding the company from potential liability rather than assisting victims and protecting passengers.
Kernersville police say that Uber driver Tarik Aitouali picked up his alleged victim at roughly 2 am on June 27, but rather than taking her to her requested destination, he drove her elsewhere, where police say he raped her. Aitouali now faces charges of second-degree kidnapping and second-degree forcible sex. Police took him into custody at Forsyth County Detention Center.
“What’s been reported is deeply upsetting, and our thoughts are with the rider during this difficult time,” an Uber spokesperson told the Winston-Salem Journal, in a statement extremely similar to the language current and former Uber investigators told the Washington Post they were trained to use with alleged victims, language designed to express sympathy for the victim without assuming any responsibility on the part of company.
“Uber said its responses are designed around empathy and include ‘I’m sorry to hear what you have reported,’” the Post reported.
“Our job is to keep the tone of our conversations with customers and drivers so that Uber is not held liable,” former Uber investigator Lilli Flores told the Post.
Uber faces numerous lawsuits in the United States and abroad seeking to hold the company liable for the alleged violent acts and sexual misconduct of its drivers. Meanwhile, the company’s background-check process and other safety measures have come under increased scrutiny, with the city of Eugene, Oregon recently having revoked the operating licenses of multiple Uber drivers who initially passed an Uber background check but later failed a check conducted by local police. Among the disqualifying items missed by the Uber background check, conducted for Uber by a third party, were a driver with a murder conviction and another who appeared on a sex offenders list, the Eugene Register-Guard reported.
Awareness of the safety issues certain Uber drivers pose to passengers is hardly new. An April 2018 investigation by CNN found that at least 103 Uber drivers had been accused of sexual assault or sexual abuse in the previous four years. The investigation also found that 31 Uber drivers “have been convicted for crimes ranging from forcible touching and false imprisonment to rape, and dozens of criminal and civil cases are pending.”
However, rather than take strong action, in the race to sustain break-neck growth, Uber has repeatedly put its own interests ahead of its passengers’ safety. The recent arrest of the alleged rapist in North Carolina is just another tragic example that little seems to have changed despite the company’s multi-million effort to rebrand itself as a more friendly, responsible company.
Sources:
Bensinger. G. (25 September 2019). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. Washington Post
Young, W. (30 September 2019). An Uber driver is accused of a sex offense and kidnapping in Kernersville. Winston-Salem Journal
Hill, C. (29 September 2019). Eugene Police: Uber, Lyft driver background checks have holes. The Eugene Register-Guard
Uber News: Oregon Police Find Red Flags That Uber’s Background Checks Missed, Including Murder Conviction and Sex Offenses
October 2, 2019
Author: Daniel Gala
As the ride-sharing giant Uber faces increasing scrutiny over its efforts to adequately protect its passengers, Oregon police officers running more stringent background checks than those performed by the multi-billion-dollar company have identified numerous instances in which individuals with potentially disqualifying criminal records were cleared to operate as drivers for the company after passing a third-party screening process. Among the overlooked records were those of a driver with a murder conviction and another who was a registered sex offender.
Following the revelations, city officials in Eugene, Oregon revoked for the individuals in question the city-issued permits via which ride-sharing drivers in the jurisdiction operate.
“In all, according to city statistics, about two dozen drivers for Lyft and Uber were allowed to drive passengers in their personal vehicles for a short time after they cleared the companies’ third-party background checks but failed the local check conducted after they were allowed to work,” the According to a The Eugene Register-Guard reported September 29.
The inability of Uber’s own background checks to turn up major red flags easily obtained by local law enforcement, such as felony criminal convictions and membership in public sex-offender registries, comes on the heels of a September 25 According to a report by The Washington Post that found that Uber’s so-called Special Investigations Unit investigators “are coached by Uber to act in the company’s interest first, ahead of passenger safety.”
The recent reports raise further concerns over Uber’s balancing of passenger safety with its insatiable appetite for putting more drivers on the road in more locations worldwide. The ride-sharing giant, long criticized for harboring a misogynistic company culture that historically has paid little heed to regulatory impediments posed by local rules, already faces numerous lawsuits filed by Uber passengers who allege that they were the victims of improper and even criminal behavior on the part of their Uber drivers, including violence and sexual misconduct.
In Eugene, the city’s inspection manager Rachelle Nicholas said that local background checks represented an important safety measure in keeping potentially unsafe drivers from being permitted to operate ride-sharing vehicles in the area.
“If they know they’re going through an EPD [Eugene Police Department] background check, they’re less likely to come in and even ask for a license because they know they’re not going to pass,” Nicholas told the Register-Guard.
However, critics ask why city officials and law enforcement officers are required to perform duties that should be performed by the multi-billion-dollar, for-profit enterprise seeking to do business in their jurisdictions. They further ask why Uber employs third-party background checks that are capable of missing such publicly available information as prior felony convictions.
The current system in Eugene, Oregon is the product of negotiations between local officials and ride-sharing giants Uber and Lyft. After initially being barred from operating in the jurisdiction in 2015, Uber and Lyft reached an agreement that allowed both services to relaunch in the city in September 2018. The system allows would-be ride-share drivers to obtain a license from the city upon furnishing a third-party background check provided by Uber or Lyft. Only after ride-share drivers receive this license to operate are they subject to an additional background check run by Eugene police.
While the city uses a similar program for approving taxi drivers, those drivers must wait until the completion of the background check conducted by local police before they may receive a license to operate.
The local background check process can take approximately ten days to complete, with Eugene police looking up state records going back ten years for felony arrests or convictions and three years for misdemeanor arrests or convictions. They also conduct a search for open court cases against the applicant.
A spokesperson for Uber defended the company’s system, saying Uber conducts a national background check for misdemeanor and felony convictions. However, the search is less thorough than that conducted by EPD.
“With continuous checking and annual background check reruns, we will remove someone’s access to the app in accordance with local laws and our screening standards,” Uber spokesperson Kayla Whaling said.
However, with alleged incidents of serious driver misconduct—including rape—on the rise, one might be left to wonder whether Uber’s “screening standards” are up to the task of ensuring safety for Uber’s millions of passengers.
Sources:
Hill, C. (29 September 2019). Eugene Police: Uber, Lyft driver background checks have holes. The Eugene Register-Guard
Bensinger, G. (25 September 2019). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. The Washington Post
Uber Lawsuit News: Amid Accusations Of Driver Violence And Sexual Misconduct, Uber Investigators Put Company First: WaPo
September 27, 2019
Author: Daniel Gala
For years, ride-sharing giant Uber has faced a growing number of lawsuits filed by its passengers and even third parties alleging that they were victims of violence and/or sexual misconduct perpetrated by the company’s drivers. Alleged victims and advocates have accused Uber of failing to take adequate measures to ensure passenger safety, including, among other things, conducting sufficiently in-depth screening of its massive fleet of drivers.
Now, a new investigative report published September 25 by the Washington Post has found that, when alleged incidents are reported to Uber, the very individuals tasked with investigating the claims are trained to favor the company’s interests ahead of those of the alleged victim. The Post report looked into Uber’s so-called Special Investigations Unit (SIU), unearthing disturbing claims, including that the company forbid its investigators from contacting police, no matter how serious the allegations.
“[W]hen they make a determination, the SIU investigators are coached by Uber to act in the company’s interest first, ahead of passenger safety, according to interviews with more than 20 current and former investigators,” reads the Post report. “Uber has a three-strikes system, investigators said, but executives have made exceptions to keep drivers on the road.”
This has included Uber’s reportedly turning a blind to multiple allegations of criminal conduct on the part of a single driver, sometimes with tragic consequences.
“For instance, a New York-area driver allegedly made three separate sexual advances on rides,” according to an Uber investigator who had been assigned to the case, the Post reported. “After an executive overruled the investigator the driver was allowed to continue working until a fourth incident, when a rider claimed he raped her.”
When such horrific allegations do arise, Uber prohibits its investigators from contacting the police or from advising alleged victims to do so themselves. They also are prevented from suggesting that an alleged victim seek legal counsel, according to former investigators who spoke to the Pos. When drivers are barred from the Uber platform due to misconduct, the company does not make a practice of informing any of its ride-sharing competitors or third-party background-check companies.
“Investigators are there first to protect Uber, and then next to protect the customer,” said former Phoenix-based investigator and investigator-trainer Lilli Flores. “Our job is to keep the tone of our conversations with customers and drivers so that Uber is not held liable.”
Uber investigators who spoke to the Post also noted being caught up in the internal contradictions wrought by Uber’s continuing insistence that its drivers are independent contractors—that is, operators of their own solo businesses who simply utilize the Uber platform to connect to customers—rather than Uber employees. The company has used this legal argument to avoid millions if not billions in payroll taxes and other fees, while costing its drivers benefits such as overtime pay and the ability to unionize. Perhaps even more callously, Uber has used the distinction to shield itself from liability over the actions of its drivers, no matter how violent or criminal.
“Uber’s investigative process is broken, according to people who have worked there, stymied by Uber’s insistence that its drivers are independent contractors and not employees,” the Post reports. “As a result of its transformation of transportation, Uber has created new risks for riders and drivers that it largely keeps at arm’s length—even more so as it is under financial pressure from a bungled IPO.”
Allegations of sexual assault and other sexual misconduct on the part of Uber drivers alone has been an enormous and ongoing problem for the ride-sharing giant. A CNN investigation released in April 2018 found that at least 103 Uber drivers had been “accused of sexually assaulting or abusing their passengers in the past four years.”
Accordingly, Uber faces a growing number of lawsuits seeking to hold the company accountable for such criminal acts on the part of its drivers, who Uber is responsible for connecting to many of their alleged victims.
Uber denies allegations that a key aim of its SIU is to deflect liability from the company for the misconduct of its drivers, whatever the impact on alleged victims.
“We created the SIU team not to shelter us from legal liability, but to provide specialized customer support to riders and drivers dealing with very serious real-life situations,” an Uber spokesperson said. “Characterizing this team as anything but providing support to people after a difficult experience is just wrong.”
However, Tracey Breeden, Uber’s global head of women’s safety, put things a bit more bluntly:
“At the end of the day, we’re not the judge and jury to determine whether a crime has occurred. We’re here to gather information, make a business decision. We’re not law enforcement.”
That being the case, one might ask, why doesn’t Uber then report these incidents to the property authorities, or at least advise alleged victims that they do so themselves?
Source:
Bensinger, G. (25 September 2019). When rides go wrong: How Uber’s investigations unit works to limit the company’s liability. Washington Post.
O’Brien, S. et al. (30 April 2018). CNN investigation: 103 Uber drivers accused of sexual assault or abuse. CNN Money.
Uber Lawsuit News: Legal Action Challenges Uber On Price Fixing Grounds
September 26, 2019
Author: Daniel Gala
A legal action with potentially existential ramifications for the business model of ride-sharing giant Uber is nearing arbitration, with a Connecticut-based driver having sued the company over price-fixing allegations. The case takes a new approach to challenging Uber’s control over its drivers, accepting on its face the company’s argument that its drivers are independent contractors and using that as a basis to accuse the embattled company of price fixing.
In brief, the legal argument made by the representatives of Connecticut Uber driver Spencer Meyer goes as follows: If, as Uber has argued, its drivers are not employees but independent contractors each operating his or her own individual business, then Uber’s practice of charging surge pricing represents price-fixing among the many businesses operated by Uber drivers.
“This has always been a simple case,” Andy Schmidt, an attorney for the plaintiff Meyer, told Vice’s Motherboard. “Uber wants to have it both ways.”
“Uber says its drivers are independent actors. But Uber drivers do not compete against each other on price. When they surge prices, they do so in unison, something that could not happen without Uber’s coordination. Is that price fixing? We think the answer is yes.”
Initially filed as a prospective class action lawsuit in 2015, the case subsequently was removed from federal court when Uber sought to enforce an arbitration clause included in its contracts with new drivers. In order to avoid arbitration, a driver must affirmatively opt out of the arbitration agreement at the time of joining Uber.
However, earlier this year, an arbitrator ruled that any price-fixing finding during arbitration could provide the basis for further action in federal court, according to Motherboard. Such a finding could have a devastating impact on Uber’s already dubious business model, experts say.
“If it doesn’t have control of its own prices, then drivers really get to set the prices and it opens drivers up to other workplace structures,” Veena Dubal, a law professor at University of California Hastings, who specializes in gig-economy employment structures, told Motherboard. “Drivers can use the price to get control over other things too, saying, ‘we’ll agree to this price if you do X, Y, and Z. If you share proceeds from data with us or if we co-own the data.’ [Uber] lose[s] control over everything if they lose control over price.”
Should the price-fixing argument gain traction, Uber could find itself in a legal catch-22: If it continues to argue that its drivers should be classified as independent contractors, it exposes itself to price-fixing allegations; if it allows drivers to be classified as employees, this poses other issues that also have been described as posing existential threats to the company.
At the heart of Uber’s argument that its drivers are not employees is the company’s contention that it is in the technology business, not the transportation business, and workers classified as “employees” must perform services core to the business’s operations. While such views have been supported by the rulings of certain courts and regulatory bodies in the United States, in 2017, the European Court of Justice struck down the argument, ruling that Uber must obey the regulations governing taxi operators.
A service such as Uber, the court ruled, “the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as a ’service in the field of transport’ within the meaning of EU law,” according to an excerpt quoted by The Guardian.
Increasingly, it appears that Uber is stuck between a rock and a hard place, legally speaking, with its notorious ask-forgiveness-later-rather-than-permission-first approach to rapid growth appearing to finally be catching up with it.
Sources:
Ongweso, E. (23 September 2019). This Cases Will Decide If Uber’s Surge Pricing Is Illegal. Motherboard Tech By Vice
The Guardian. (20 December 2017). Uber to face stricter EU regulation after ECJ rules it is a transport firm
Uber Lawsuit News: Uber’s Litigation-Happy Approach Has It Suing New York City (Again)
September 23, 2019
Author: Daniel Gala
Uber just can’t seem to get enough legal action.
Amidst thousands of lawsuits and arbitration demands filed by drivers challenging their employment classification; passengers alleging they were victims of violence and/or sexual misconduct on the part of Uber's drivers; third parties alleging they suffered injury during traffic accidents caused by Uber drivers; and investors claiming Uber lied to them in the lead up to its highly anticipated (but highly disappointing) IPO, Uber has once again sued New York City, one of its biggest potential markets, over anti-congestion rules enacted by the city’s elected officials.
“While reducing congestion in Manhattan is an important goal—and one Uber has publicly and vocally supported—the August 2019 rule is the product of a rushed and unlawful process, including reliance on flawed and arbitrary economic modeling, which was designed to arrive at a predetermined result that is likely not even feasible,” Uber’s court filing argues, per the Daily News.
The new lawsuit, filed Friday, September 20, is in response to New York City’s most recent steps to reign in the number of ride-share drivers operating on the city’s already congested streets. In August, the New York City Taxi and Limousine Commission voted to extend regulatory limits on the number of ride-sharing vehicles permitted to be operate within the city limits. The original ban preventing the issuance of any new ride-sharing licenses—with an exception for wheelchair accessible vehicles—was intended to last for 12 months, but the August vote saw the commission extend the cap for an additional 12 months.
The rules, passed during an August 7 meeting, further restricted the practice of so-called “deadheading”, that is, the time during which ride-sharing drivers are operating a vehicle without a paying passenger inside. The new regulations restricted the permissible deadheading time from 41 percent to 31 percent. Experts have cited deadheading as a key contributor to New York City’s notoriously bad traffic congestion.
However, Uber has not taken the new rules quietly, seeking to associate them with New York City’s unpopular current mayor Bill de Blasio.
“Drivers’ flexibility is already being threatened by Mayor de Blasio’s regulations, and the cruising cap will only make that worse,” said an Uber spokesperson, as quoted by The Verge.
Meanwhile, a spokesperson for the mayor’s office previously had commented that the anti-deadheading regulations “will bring needed relief to congested streets and hardworking drivers. The City’s rules makes our streets safer and is in the best interest of all New Yorkers.”
New York City is not the only jurisdiction where Uber has decided to take a confrontational approach to rules and regulations enacted by elected officials who represent many of Uber’s own customers. With California Governor Gavin Newsom earlier this month having signed a new employment rights bill into law, rather than respect the will of its customers duly elected officials, Uber has vowed to fight the new rules in court and via a statewide ballot initiative toward which it already has pledged some $30 million.
Largely by the company’s own making, Uber’s legal woes do not appear to be going away any time soon.
Sources:
Hawkins, A. (20 September 2019). Uber sues New York City to overturn limits on drivers cruising without passengers. The Verge
Hawkins, A. (7 August 2019). New York City extends its cap on new Uber and Lyft vehicles. The Verge
Daily News
Uber Lawsuit News: Calif. Gov. Signs Employment Bill Into Law, Setting Stage For Legal Battle With Uber, Other Gig Employers
September 20, 2019
Author: Daniel Gala
California Governor Gavin Newsom signed into law September 18 landmark legislation aimed at granting greater employment rights to so-called ‘gig economy’ workers across the state, including thousands of drivers for the ride-sharing giant Uber. The legislation passed despite fierce opposition from Uber and other companies whose business models rely heavily on categorizing the vast majority of their workers as independent contractors rather than employees.
“Assembly Bill 5 is landmark legislation for workers and our economy,” Governor Newsom said in a statement accompanying his signing the bill into law. “It will help reduce worker misclassification—workers being wrongly classified as ‘independent contractors,’ rather than employees, which erodes basic worker protections like the minimum wage, paid sick days and health insurance benefits.”
The new law, which will take effect January 1, 2020, adopts a revised standard for worker classification based on a test employed by the California Supreme Court in its 2018 Dynamax decision. That test, known as the ABC test, makes it easier for workers in the gig economy to be categorized as employees rather than independent contractors.
Uber and other gig-economy employers have faced tens of thousands of lawsuits and arbitration demands filed on behalf of workers challenging their status as independent contractors, a status that results in their being denied basic rights afforded to workers classified as employees, including a minimum wage and the ability to unionize.
In a conference call held after the California legislature passed AB5, Uber’s top lawyer Tony West made it clear that the company would not be making any unilateral changes to its driver-classification policy in light of the new law, paving the way for yet more litigation.
“Because we continue to believe that drivers are properly classified as independent, and because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility— drivers will not automatically be reclassified as employees even after January of next year,” West said during a September 11 conference call with reporters.
Central to Uber’s argument that its drivers do not qualify as employees is the company's contention that, despite the vast majority of its billions of dollars in annual revenue coming from transportation services performed by its drivers, they do not engage in work that is core to the company’s business.
“That legal test [adopted by the Dyanamex ruling and AB5] is called the ABC test and it certainly does set a higher bar for companies to demonstrate that independent workers are indeed independent,” West said during the conference call. “Under that three-part test, arguably the highest bar is the second prong, that a company must prove that the contractors are doing work outside the usual course of its business.”
Uber has maintained for years that its core business is as a technology company, not a transportation provider, meaning that the services provided by its drivers are not central to its business, no matter what percentage of the company’s total revenue they may account for.
Uber’s chief counsel and corporate secretary West also made clear that the company will not limit its fight against AB5 to the courts alone, with Uber and its often-times competitor Lyft having momentarily set aside their fierce rivalry to team up against their drivers, pledging tens of millions of dollars each to take the issue directly to California voters through the state’s ballot initiative process.
“We’ll continue to advocate for a compromise agreement and we were encouraged by Governor Newsom’s comments as reported by the Wall Street Journal this morning that he’s fully committed to negotiating a solution,” West said. “But we’re also pursuing several legal and political options as well, including working with Lyft and other Internet platform companies to lay the groundwork for a statewide ballot initiative in 2020. Now, Uber and Lyft together have already transferred $60 million into a campaign committee account and we’re open to investing more to put us in the strongest position possible to run a winning campaign.”
In the statement accompanying his signing of AB5, Governor Newsom places the struggle for greater rights for gig-economy workers within the broader context of the fight for workers' rights and the decades-long decline of the American middle class.
“The hollowing out of our middle-class has been 40 years in the making, and the need to create lasting economic security for our workforce demands action,” Gov. Newsome’s statement reads. “Assembly Bill 5 is an important step. A next step is creating pathways for more workers to form a union, collectively bargain to earn more, and have a stronger voice at work—all while preserving flexibility and innovation.”
With both sides firmly entrenched in what they see as a struggle between basic worker protections and the gig-economy tech giants’ business model, the signing into law of AB 5 does not mark the end but only a new phase in the battle over the future of labor.
Sources:
California Legislative Counsel. (Approved by Governor 18 September 2019). Assembly Bill No. 5. Chapter 296. An act to amend Section 3351 of, and to add Section 2750.3 to, the Labor Code, and to amend Sections 606.5 and 621 of the Unemployment Insurance Code, relating to employment, and making an appropriation therefor
Office of the Governor. (18 September 2019). Statement Accompanying The Signing Of Assembly Bill 5
Uber Technologies, Inc. (11 September 2019). Press Call with Uber Director of California Public Affairs Davis White and Senior Vice President, Chief Legal Officer and Corporate Secretary Tony West
Uber Lawsuit News: Australian Food Delivery Drivers Join Flood Of Plaintiffs Suing Uber
September 19, 2019
Author: Daniel Gala
Joining a slew of thousands of lawsuits facing ride-sharing giant Uber around the globe, two Australia-based former drivers for the company's UberEats platform filed a lawsuit September 16 challenging a recent ruling by Australia’s Fair Work Commission, which determined that the company’s drivers do not qualify as employees. Among the allegations contained in the new lawsuit is that UberEats fails to pay its workers the Australian minimum wage.
The plaintiffs join delivery drivers for UberEats competitors Foodora and Deliveroo, which already face lawsuits filed by their drivers. The Fair Work Commission has ruled that Foodora’s drivers do qualify as employees, but the Fair Work Ombudsman (FWO) has said Uber enjoys a different relationship with its workers.
“For [an employment] relationship to exist, the courts have determined that there must be, at minimum, an obligation for an employee to perform work when it is demanded by the employer,” said FWO Sandra Parker, according to ZDNET.
In the instant case, one of the plaintiff UberEats drivers, Amita Gupta, claims that she has spent 96 hours on-call to deliver orders but was compensated only about AU$4 per hour for her time, far below the Australian minimum wage of AU$18.93. The Transport Workers Union (TWU) is supporting the UberEats lawsuit in addition to similar claims against Foodora and Deliveroo.
“The Ombudsman are always going to be there to enforce the law, but the current law is flawed,” said TWU national secretary Michael Kaine, per ZDNet. “What we need is a body in place, a body that can set out what the appropriate rights should be for these workers right across a class, a body that can exist as a gatekeeper so that these new technology vehemists can’t come in and just find a way around these laws.”
Uber continues to maintain that, because it considers itself a technology company and not a transportation company, its drivers qualify as independent contractors and not employees.
“Several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces,” said Tony West, the top lawyer for Uber, which rakes in billions in revenue each year off transportation services provided by its drivers across its Uber, UberEats, and UberFreight platforms.
The new lawsuit is hardly the first to face Uber down under. More than 6,000 Australia-based taxi drivers have joined a class action against the company, accusing Uber of operating unlawfully in the country from April 1, 2014 through July 31, 2017, during which period Uber and its drivers did not have permission to operate under Australian law. The taxi drivers allege that Uber’s improper actions caused damages, including financial losses, for which they now seek compensation.
“Uber welcomed the Fair Work Commission’s decision on this matter,” commented an Uber spokesperson, according to ZDNet. “[The Ombudsman decision ruling UberEats drivers are not employees] reflected what delivery partners tell us—that they value the freedom and flexibility the Uber app provides.”
That Uber’s millions of drivers around the globe prefer this supposed “freedom and flexibility” more than the rights afforded employees, including the right to a minimum wage and the ability to unionize, is called into questions by the tens of thousands of lawsuits and arbitration demands brought on behalf of Uber drivers seeking legal classification as employees.
Sources:
Kwan, C. (16 September 2019). Uber hit with lawsuit from former food delivery drivers. ZDNET
Uber Lawsuit News: 'He Could Drive Wherever He Wants, Turn Off The Application And Do Something Bad’: Uber Faces Another Lawsuit Over Alleged Driver Sexual Misconduct
September 16, 2019
Author: Daniel Gala
For Uber, the legal woes just keep on coming.
Viewed by many as the inevitable fallout from Uber’s take-no-prisoners approach to explosive growth, notoriously misogynistic tech-bro culture, and its infamous lack of regard for existing local rules and regulations, the ride-sharing giant faces mounting legal opposition on numerous fronts, including lawsuits and arbitration demands filed by thousands of the company’s drivers, passengers, and investors making a number of serious allegations about Uber’s business practices.
Among the most serious of these claims are the numerous lawsuits filed against Uber alleging violence or sexual misconduct on the part of the company’s drivers, with the claimed behavior often being directed at the drivers’ own passengers. These suits seek to hold Uber vicariously responsible for the wrongful acts of its drivers, claiming, among other things, that Uber has acted improperly in allowing drivers that the company knew or should have known pose a risk to passengers to continue performing services through its platform.
In one of the most recent examples of alleged sexual impropriety on the part of an Uber driver, a Long Island woman has sued the ride-sharing company, saying one of its drivers engaged her in inappropriate sexual conversation before attempting to kiss her, all with the woman’s two-month-old newborn baby in the car with her.
Plaintiff Maryna Yaramiachuk claims that during an Uber ride on September 30, 2018, her driver “turned simple banter into a sexual conversation about our client’s love life,” according to the lawsuit filed in the Manhattan Supreme Court, quoted in part by the New York Post. The driver allegedly asked the plaintiff if her husband satisfied her in the bedroom and recommended that the two go to a nearby location to “have a good time.”
“I was praying to God to make it to Brooklyn,” the plaintiff Yaramiachuk told the New York Post. “I had the Uber application on just to make sure I was going the right way.”
“He could drive where he wants, turn off the application and do something bad,” she added.
When the vehicle arrived at Yaramiachuk’s destination, her parents’ home in Brooklyn, she alleges that the Uber driver then put his hands on her and forcibly kissed her.
The 30-year-old Yaramiachuk complained directly to Uber, which she says refunded her $29 ride and said they were opening an investigation into the driver. However, she says the company never followed up on the results of its investigation or any disciplinary actions taken in response.
“Uber holds itself out as a safe mode of transportation for the public including women and children,” said lawyer Adam Slater, representing Yaramiachuk, according to the New York Post. “Clearly they let my client, her daughter and many others down and must be held accountable.”
Unfortunately, Yaramiachuk is hardly alone in her allegations. According to an April 2018 report by CNN, its journalists discovered at least 103 different instances of Uber drivers being accused of sexual assault or sexual abuse in the four years preceding the report’s publication. Because there is no national, publicly available database cataloguing all such claims, CNN’s investigation covered only federal and county court records for 20 of the nation’s largest cities, meaning that the actual number of cases likely is much higher than the 103 identified.
Yaramiachuk's lawsuit reportedly seeks $75,000 in damages.
Source:
DeGregory, P. (6 September 2019). Creepy Uber driver kissed Long Island woman with 2-month old: lawsuit. The New York Post
O’Brien, S.A.; Black, N.; Devine, C.; and Griffin, D. (30 April 2018). CNN investigation: 103 Uber drivers accused of sexual assault or abuse. CNN
Uber Lawsuit News: ‘The State Of California Has Spoken’: Uber Drivers File Lawsuits In Wake Of New California Employment Law
September 15, 2019
Author: Daniel Gala
Well, that didn’t take long.
As predicted, within days or even hours of the California state senate on September 10 passing legislation that would codify changes to the state’s employment laws pertaining to the classification of workers as employees or independent contractors, Uber drivers brought a series of legal actions challenging their employment status.
With Uber’s top lawyer saying that the company would not be adjusting the classification of its thousands of California-based drivers based on the new law, attorneys representing Uber drivers were quick to respond, filing a prospective class-action lawsuit in San Francisco federal court on Wednesday, September 11, CNET reported
.
“Uber is claiming that the law doesn’t apply to it which doesn’t pass the straight face test,” attorney Shannon Liss-Riordan, a long-time advocate for the rights of gig-economy workers, told CNET. “The state of California has spoken—both through its Supreme Court and its legislature—that workers must be paid fair wages and that employers like Uber cannot avoid their responsibilities under the law.”
Despite the change in law and the California Supreme Court’s 2018 Dynamex decision referenced by Liss-Riordan, Uber has chosen to continue to push the same argument as to why its drivers do not qualify as employees. Despite raking in billions of dollars in revenue directly from rides performed by its drivers, Uber continues to claim that it is a technology company, not a transportation company, thereby making the work of its drivers not core to the company’s business.
This semantic loophole has provided the legal basis underlying the entire gig economy, in which “disruptive” startups have behaved according to the fiction that their workers are contractors operating their own independent businesses rather than employees working under strict parameters set by their employers. By classifying their workers as independent contractors rather than employees, companies save millions if not billions of dollars while denying workers rights such as a minimum wage, paid overtime, and the ability to unionize to collectively bargain for better working conditions.
Despite the California Supreme Court and state legislature now having taken direct action to address concerns over the legality and potential exploitation of such employment models, Uber, headquartered in San Francisco, continues to push back.
“Just because the test is hard doesn’t mean that we will not be able to pass it,” Uber’s chief legal officer Tony West told reporters on a press call held September 11, per CNET, referring to the so-called ABC Test adopted in both the Dynamex decision and the recently passed legislation, known as AB 5. “We continue to believe drivers are properly classified as independent.”
West reiterated that, even in light of the change in law, the company does not plan to reclassify its drivers as employees now or when the law goes into effect on January 1, 2020, even if this means provoking yet another legal fight for the embattled company, which, just over a month ago, reported both the largest quarterly loss and slowest growth in its history, while also reportedly shedding hundreds of jobs over the course of the summer.
Meanwhile, Uber is devoting tens of millions of dollars toward legal costs, lobbying, and other efforts aimed at denying their thousands of California-based drivers greater employment rights. In August, fierce ride-sharing competitors Uber and Lyft announced that they were teaming up to, in essence, defy the California Supreme Court and the California legislature by funding a ballot initiative that would take the issue of driver classification directly to voters. The companies, along with delivery service DoorDash, pledged to contribute $30 million each toward the initiative, meaning that California voters are sure to be hit with a deluge of campaign ads aimed at swaying their views on the topic.
Despite recent attempts by Uber to shed it’s reputation for having cultivated a misogynistic “tech bro” culture and for engaging in bull-in-a-china-shop-style tactics when entering new markets, the company’s willingness to take a confrontational approach to dealings with both its own drivers and its efforts to directly circumvent the political will expressed by the elected officials representing many of the company’s customers shows that, despite superficial changes such as bringing on a new, more PR-friendly CEO, the core of Uber remains the same.
“Uber is no stranger to legal battles,” West told reporters. “We operate in a very regulated environment and we recognize that there will be legal challenges on all fronts.”
Liss-Riordan, the attorney representing gig-economy workers including Uber drivers, sees the company’s stance as a mere profit grab, pure and simple.
“Uber is a multibillion dollar company,” she told CNET. “It can afford to pay its workers properly if it wants to continue its business.”
Sources:
Kerr, D. (13 September 2019). Uber hit with new lawsuit on whether its drivers are employees. CNET
Schleifer, T. (8 August 2019). Uber lost an eye-popping $5 billion in a single quarter. Vox Recode
Chapman, L. (10 September 2019). Uber Makes Further Cuts to Its Staff as Losses Pile Up. Bloomberg
Rodriguez, S. (29 August 2019). Uber and Lyft pledge $60 million to ballot measure in fight to keep drivers’ classification as contractors. CNBC
Uber Lawsuit News: Reversing Lower Court, 3rd Circuit Finds Uber’s Driver Arbitration Agreement Potentially Invalid
September 11, 2019
Author: Daniel Gala
On Wednesday, September 11, the federal Third Circuit Court of Appeals issued a ruling that could lay the legal foundation for a lower court to declare ride-sharing giant Uber’s arbitration agreement, which the company encourages all of its drivers to sign upon commencing work, legally unenforceable. The ruling opens up a potential pathway for drivers who have signed the arbitration agreement to join or remain in pending class-action litigation rather than having to pursue individual arbitration actions.
The decision of the three-judge panel sitting for the Third Circuit reversed a lower-court judge’s interpretation of Section 1 of the The Federal Arbitration Act (FAA), which states in part that “nothing herein shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” (Emphasis added.)
US District Court Judge Freda Wolfson had found that named plaintiff Jaswinder Singh’s work with Uber did not qualify him as among “any other class of worker engaged in foreign or interstate commerce,” ruling that the clause only applied to workers transporting goods, not those transporting people.
The Third Circuit disagreed with Judge Wolfson’s interpretation of Section 1 of the FAA, saying in its decision that the clause does indeed apply to workers engaged in the transporting of human passengers as well as those moving goods. However, the appellate court did not make a ruling as to whether the plaintiff Singh’s driving for Uber qualified as “engaged in foreign or interstate commerce,” remanding that factual question to the district court.
Whether or not Section 1 of the FAA applies to Uber drivers goes directly to the enforceability of the arbitration agreements Uber has executed with thousands and perhaps millions of its drivers across the country. By entering into arbitration agreements, Uber had sought, among other things, to prevent drivers from banding together to join class-action lawsuits such as the company now faces.
“We are excited by the Third Circuit’s opinion,” said Swartz Swidler, an attorney for named plaintiff Singh and the class of plaintiffs, according to the New Jersey Law Journal. “We think [the decision] is going to protect drivers in this state and others, which we are very comforted to see, especially with some of the abuses that gig economy workers put up with.”
Uber faces numerous legal actions nationwide brought on behalf of thousands of its drivers challenging their classification as independent contractors rather than employees. Categorizing workers as independent contractors—a common practice among so-called “gig-economy” employers—saves companies like Uber millions of dollars annually in payroll taxes and other savings while pushing additional costs onto workers. In addition, workers categorized as independent contractors do not qualify for many rights afforded to workers classified as employees, such as overtime pay and the ability to unionize.
Plaintiff lawyer Swidler expects that the Third Circuit’s ruling will have ramifications for cases throughout the US.
“We expect it will be a heavily-cited case,” he told the New Jersey Law Journal.
Sources:
Toutant, C. (11 September 2019). 3rd Circuit Vacates Arbitration Order in Uber Drivers’ Job Classification Lawsuit. New Jersey Law Journal
The Federal Arbitration Act (FAA). (First enacted 12 February 1925). Title 9, US Code, Section 1-14
Uber News: Calif. Gov. Calls For Passing Of Bill That Would Change Status Of Uber Drivers, Other Gig Workers
September 11, 2019
Author: Daniel Gala
With the California state senate set to take up in September a workers' rights bill that likely would result in the reclassification of thousands if not millions of California workers as employees rather than independent contractors, California Governor Gavin Newsom had published under his name on Labor Day an op ed urging legislators to pass the bill and pledging his willingness to sign it if and when they do.
Though the proposed legislation, which passed the state assembly earlier this year, would impact so-called “gig” workers across the economy, one of the industries expected to be hit the hardest (and most visibly) is ride-sharing, a fact that Gov. Newsom references obliquely in his opinion piece, published September 2 in the Sacramento Bee.
“Will I get enough hours this week? If my kid is sick and has to miss school, will I have to miss paid work?” Newsom wrote, describing the uncertainty facing gig-economy workers, who are not afforded the same rights and protection as workers classified as employees. “Will I get enough passengers to earn what I need?”
Unsurprisingly, ride-sharing giants Uber and Lyft, often engaged in a fierce rivalry for industry dominance, have teamed up to mount some of the fiercest resistance to the passing of the workers’ rights legislation, which would codify into law a new test for determining whether workers qualify as employees or independent contractors. The ABC Test, as it is known, was employed by the California Supreme Court in its landmark 2018 Dynamex ruling.
With its implications for gig-economy workers and their employers across what is not only the nation’s most populous state but also the home to many of the tech giants whose business models rely heavily on the use of independent contractors to fulfill core functions, the state legislation, known as AB 5, has attracted national attention.
“A battle over the future of the gig economy is being fought in the California legislature this week, as lawmakers consider a controversial bill that would require companies—including the tech giants Uber and Lyft—to bring their independent contractors on board as employees,” USA Today reported September 6. “If enacted, proponents of the bill say it will secure labor protections like minimum wage, overtime and workers compensation for more than a million Californians, bring in more tax revenues from businesses, and enable unionization efforts spreading through the gig industry.”
The California legislation has attracted attention from Democratic Party presidential hopefuls, as well. On August 27, candidate Pete Buttigieg joined Uber and Lyft drivers in San Francisco, as they protested against the companies treatment of their drivers and in favor of AB 5.
“Do we want a better future for everyone, whether full-time in a traditional company or not? Will we stand up for that? Yes,” Buttigieg said to the crowd, per the San Francisco Chronicle.
Perhaps resigned to the likelihood of the legislation making its way through the state senate to a governor who already has promised to sign it into law, Uber and Lyft have pledged publicly to spend tens of millions of dollars to back a new state-wide proposition that, in essence, seeks to supersede the actions of California’s legislative and judicial branches by taking the issue directly to California voters.
On August 2019, the ride-sharing giants, finding rare common ground in their fight to keep drivers classified as independent contractors, pledged a staggering $60 million toward an initiative that would appear on the California ballot in November 2020.
“Under Lyft and Uber’s proposed ballot measure, California drivers would be receive [sic] more protections and benefits while maintaining their status as independent contractors,” CNBC reported August 29. “Those benefits would include a minimum of earnings of $21 per booked hour, injured worker protection, and paid sick leave and paid family leave for those who drive a minimum of 20 hours per week.”
While the companies have maintained publicly and in court that most of their drivers’ prefer the supposed freedom and flexibility that their status as independent contractors allegedly affords them, the companies' position is contradicted by the thousands of lawsuits and arbitration demands filed on behalf of ride-share drivers who say that they have been misclassified, costing them basic rights that are afforded to workers classified as employees.
“Independent contractors don’t qualify for protections under the Fair Labor Standards Act, Americans with Disabilities Act, or the Civil Rights Act. They also must pay the entire portion of payroll taxes, lowering their take-home wages,” according to USA Today. “That’s why they are so much cheaper for companies to hire. The National Employment Law Project estimates businesses save roughly 30% in costs when they work with independent contractors instead of hiring employees.”
Meanwhile, a recent estimate published in the San Francisco Chronicle found that, based on data from the U.S. Bureau of Labor Statistics (BLS), driving for Uber and/or Lyft is one of the most hazardous occupations in the US.
“I used recent BLS data to estimate risks and job percentile rankings,” Paul Leigh, professor emeritus in the Department of Public Health at the University of California Davis, wrote in an Open Forum piece published by the Chronicle on July 25. “The non-fatal injury rate estimate for Uber and Lyft drivers is 173.8 per 10,000 full-time workers, with percentile raw 13.0. This indicates that 86.9% of jobs have lower injury rates and 12.9% have higher injury rates.”
Additionally, Leigh’s analysis found that Uber and Lyft drivers face a greater risk of on-the-job fatalities than either police officers or firefighters.
“My estimates also indicate that Uber and Lyft drivers face fatal risks that are 1.1 to 2.6 times the fatality rate for police officers and firefighters,” Leigh wrote.
As they continue to deny their millions of drivers any form of health insurance and even proactively stifle their workers’ ability to bargain collectively for such rights, execs at Uber and Lyft have not concealed that they view the driver classification issue as an existential threat to their business models. Both companies held multi-billion dollar IPOs earlier this year, allowing founders, early investors, and other shareholders—but not the drivers on which the company relies to perform its core services—to cash out to the tune of hundreds of millions, if not billions, of dollars.
“It’s also no secret that a change to the employment classification of ride-share drivers would pose a risk to our businesses,” stated an op ed published under the names of Uber CEO Dara Khosrowshahi and Lyft co-founders Logan Green and John Zimmer, published in the San Francisco Chronicle in June.
Sources:
Newsom, G. (2 September 2019). On Labor Day, let’s pledge to protect workers and create paths to union membership. The Sacramento Bee
Moench, M. (27 August 2019). Buttigieg joins Uber, Lyft drivers in San Francisco gig-work protest. San Francisco Chronicle
Canon, G. (6 September 2019). What is California’s AB 5? The bill could make gig economy workers like Uber drivers employees. USA Today
Rodriguez, S. (29 August 2019). Uber and Lyft pledge $60 million to ballot measure in fight to keep drivers’ classification as contractors. CNBC
Khosrowshahi, D., Green, L., and Zimmer, J. (12 June 2019). Open Forum: Uber, Lyft ready to do our part for drivers. San Francisco Chronicle
Uber Lawsuit News: Uber Faces First Lawsuit In Canada Over Alleged Sexual Assault By Driver
September 5, 2019
Author: Daniel Gala
With hundreds of lawsuits having been filed in the US seeking to hold ride-sharing giant Uber accountable for alleged sexual assaults and other acts of violence claimed to have been perpetrated by its drivers, no similar actions had yet been brought north of the border. Until now.
In a case that has the potential to start a flood of similar lawsuits in Canadian courts, an anonymous alleged victim has sued Uber over a sexual assault she says was committed by an Uber driver in July. The lawsuit, which seeks $5 million in damages, is believed to be the first action of its kind to be brought in Canada, opening up a new and particularly troubling front in Uber’s many ongoing legal battles, which also include thousands of lawsuits and arbitration actions filed by drivers challenging their employment classification; cases brought by competing transportation companies and municipalities saying Uber acted in violation of local ride-hailing rules; and investor lawsuits alleging that Uber failed to report material information about its financial situation in the lead-up to its highly anticipated but largely disappointing IPO earlier this year.
In the Canadian lawsuit, the 20-year-old alleged victim says she received a ride home from Uber driver Suhail Siddiqi when he sexually assaulted her in a parking lot near her home. According to an account published by Vice, the woman was intoxicated when she attempted to hail an Uber ride home at approximately 2:30 am, following a friend’s birthday party. When the Uber driver who initially had accepted the woman’s ride request via the Uber app was unable to locate her, the alleged victim says that she noticed a man waiting in a nearby car that sported decals for Uber and its ride-sharing competitor Lyft.
The lawsuit alleges that the driver was Siddiqi and that he identified himself as an Uber driver, offering to give the young woman a ride home in exchange for cash, a transaction that would not involve using the Uber app. The young woman accepted, but, instead of driving her directly home, she says Siddiqi took her to a parking lot and raped her. Later, the two allegedly got into a further altercation that involved Siddiqi’s choking the woman and driving off with her phone.
The woman immediately shared the information with her mother, and the two reported the alleged incident to the police. Criminal charges also have been filed against Siddiqi, including sexual assault and robbery, as well as charges related to the alleged choking.
The alleged victim, identified in public court records only as A.B., has said she sued Uber because she had relied on the company to get her home safely.
“[Uber is] advertised as a safe way to get home,” she said, according to Vice. “I trusted them. I trusted him to get me home safely.”
The facts stated in the complaint present a number of potential legal issues, experts say, with perhaps the most relevant being the legal significance of the cash transaction the parties agreed upon having been performed without using Uber’s technology. While the alleged victim says she relied on the Uber decal and the driver’s identifying himself as an Uber driver in perceiving the driver to be safe, some experts say this could pose a problem in terms of holding Uber responsible for the drivers actions.
“The whole thing about Uber is you know who your driver is, so it makes the drivers responsible for their actions,” Daniel Lublin, an employment lawyer based in Toronto, told Vice, raising questions about the fact of the transaction having taken place “outside of the guidelines of [Uber’s] technology.”
However, Darryl Singer, the Toronto-based lawyer representing A.B., still thinks that Uber is legally responsible for its driver's alleged criminal behavior.
“It’s the Uber signage that gave her the comfort to get into the car,” Singer said. “He was an Uber driver.”
Singer told Vice that he is seeking to hold Uber responsible under the legal principal of vicarious liability, which, under certain circumstances, allows for an employer to be held responsible for the actions of its workers.
Uber said in a public statement released at the time of the alleged incident that it had taken immediate action, calling the events claimed to have taken place “horrible” and having “no place anywhere.”
“As soon as we learned of this report, we immediately removed the individual’s access to the app and revoke [sic] his license from the city,” read the statement, issued by Uber spokesperson Kayla Whaling and quoted in part by CTV News Toronto.
However, the alleged victim and her attorney say this response is wholly inadequate given the level of harm that has befallen her, arguing that Uber is responsible for failing to adequately screen Siddiqi prior to allowing him to serve as a driver on its platform.
Though the lawsuit is believed to be the first of its kind filed in Canada, hundreds of such lawsuits have been filed against ride-sharing competitors Uber and Lyft in the United States. A single law firm in San Francisco says that it alone is handling similar claims filed on behalf of dozens of alleged victims.
“Right now we have over 100 cases between Lyft and Uber,” Laurel Simes, an attorney at Levin, Simes, and Abrams, told Vice, adding, “We’re getting new cases every day.”
Sources:
Krishnan, M. (3 September 2019). Toronto Woman Sues Uber For $5 Million After She Says Her Driver Raped Her. Vice
Gurley, L. (21 August 2019). Lyft Has Been Flooded With Sexual Assault Lawsuits. Motherboard
Goodfield, K. (16 July 2019). Ride share driver accused of sexually assaulting woman in city’s north end. CTV News Toronto
Uber Lawsuit News: Uber Pledges Millions To Help Stop California Drivers-Rights Legislation
September 3, 2019
Author: Daniel Gala
Embattled ride-sharing giant Uber has pledged millions of dollars in support of a California ballot initiative that would preempt efforts by state legislators to classify the company’s drivers and other gig-economy workers as employees rather than independent contractors, the company announced Thursday, August 29, according to the New York Times. Collectively, the often-times competitors Uber and Lyft said they would contribute $60 million to the cause, with meal-delivery service DoorDash promising another $30 million.
The ballot initiative, if passed directly by state voters, would legally supersede any workers-rights bill that might make it through the California legislature. Assembly Bill 5 (AB 5), which passed the California assembly in May and is now making its way through the state senate, “[c]odifies the decision of the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) that presumes a worker is an employee unless a hiring entity satisfies a three-factor test” known as the ABC test
, according to the assembly’s floor analysis.
In its Dynamex decision, the California Supreme Court adopted a revised standard for determining whether a worker qualifies as an employee or an independent contractor, applying a test that would result in many more workers, including Uber’s drivers and other gig-economy workers, being re-categorized as employees.
Workers classified as employees are entitled to certain rights that are not afforded to workers labeled independent contractors, including the right to be paid a minimum wage and the right to unionize. Employers also are not required to make payroll tax payments for independent contractors, saving companies like Uber (and, ultimately their investors) millions if not billions of dollars.
Uber and Lyft previously have momentarily set aside their fierce rivalry to take on the common cause of worker classification, arguing that to treat drivers as employees rather than independent contractors poses an existential threat to the companies’ business models. In June, Uber CEO Dara Khosrowshahi and Lyft co-founders Logan Green and John Zimmer co-authored an opinion piece in the San Francisco Chronicle
arguing that, “[w]e can make independent work better if we update century-old employment laws” but cautioning “[i]t’s also no secret that a change to the employment classification of ride-share drivers would pose a risk to our businesses.”
California Assemblywoman Lorena Gonzalez, a Democrat representing a San Diego-area district and author of AB 5, is having none of it.
“Billionaires who say they can’t pay minimum wages to their workers say they will spend tens of millions to avoid labor laws,” Assembly woman Gonzalez posted on Twitter the afternoon of August 29. “Just pay your damn workers!"
The issue of gig-economy worker classification has gained attention at the national level, as well, becoming a key issue in the Democratic Party presidential primaries. On August 27, Democratic presidential hopeful Pete Buttigieg “joined dozens of Uber drivers who circled the company’s Market Street headquarters,” the San Francisco Chronicle reported.
“Do we want a better future for everyone, whether full-time in a traditional company or not? Will we stand up for that? Yes,” Buttigieg told the crowd.
Sources:
Conger, K. (29 August 2019). Uber, Lyft and DoorDash Pledge $90 Million to Fight Driver Legislation in California. The New York Times
Khosrowshahi, D., Logan Green, and John Zimmer. (12 June 2019). Open Forum: Uber, Lyft ready to do our part for drivers. San Francisco Chronicle
Gonzalez, Lorena S. (4:37 pm, 29 August 2019). Twitter
Moench, M. (27 August 2019). Buttigieg joins Uber, Lyft drivers in San Francisco gig-work protest. San Francisco Chronicle
California State Assembly. (24 May 2019). Assembly Floor Analysis. AB 5 (Gonzalez)
Uber Lawsuit News: Uber’s Legal Woes Mount As Former Executive Charged With Stealing Google Trade Secrets
August 29, 2019
Author: Daniel Gala
Uber’s multifaceted legal woes took on a new dimension this week as criminal charges were filed against a former executive over allegations that he stole trade secrets from his former employer Waymo, which is owned by Alphabet Inc., parent company to Google.
Anthony Levandowski, a former executive for Uber and Alphabet-owned Waymo, has been charged with 33 counts of stealing trade secrets related to Waymo’s self-driving car technology, Federal law enforcement officials announced August 27.
“All of us have the right to change jobs,” U.S. Attorney David Anderson stated at a press conference held to announce the charges, according to Bloomberg. “None of us has the right to fill our pockets on the way out the door. Theft is not innovation.”
Waymo, backed by Google and Alphabet, is one of Uber’s top competitors in the fierce and highly expensive competition to dominate the future market for self-driving cars, seen by many as the future of automotive technology.
The allegations previously had formed the basis of a massive lawsuit between Uber and Waymo, which resulted in a settlement that cost Uber nearly a quarter of a billion dollars in equity, “ending a high-stakes conflict that already cost the ride-hailing giant its top driverless car engineer and threatened to further embarrass the company,” as Bloomberg described at the time of the settlement in February 2018.
Levandowski was hired under Uber co-founder and former CEO Travis Kalanick and no longer works for the company. Kalanick, ousted after a series of scandals including allegations that he allowed a pervasive culture of sexism and sexual harassment to fester at the company, still sits on Uber’s board of directors.
Uber’s new CEO Dara Khosrowshahi has admitted that evidence seems to indicate that Levandowski stole self-driving technology from Waymo but adamantly denies that any of that information made it to Uber.
“I wasn’t there when we brought Anthony on board but what I do know is that we went to incredible depths to makes [sic] sure that any information that Anthony might have acquired from Google—and it sure looked like he did—didn’t make it over to our company,” the CEO said in an interview with Bloomberg. “That was our responsibility and I think we were incredibly diligent in making sure that we were not guilty of anything that could be nefarious one way or another.”
In addition to the allegations of trade-secret theft, Uber faces thousands of lawsuits and arbitration demands filed on behalf of drivers contesting the company’s classifying them as independent contractors rather than employees, a strategy that saves the company millions if not billions of dollars annually through the avoidance of payroll taxes and other expenses but which means its drivers are not afforded workers' rights such as a minimum wage, overtime pay, and paid sick leave. Further, numerous passengers have sued Uber seeking to hold the company liable for alleged acts of violence committed by the company’s drivers, including sexual assault.
“Every great company has to go through tough times,” Khosrowshahi said. “This is the moment where the mettle of Uber is tested and I’m very confident that we’re going to come out of this stronger than we ever have before.”
Adding to the complications, the ride-sharing giant recently announced a $5 billion loss over the second quarter of 2019 alone, its largest ever, adding to mounting disappointment in the aftermath of its much-anticipated IPO in May. Uber’s shares have tumbled more than 25% since the company went public, according to Bloomberg.
Sources:
Necomer, E. and Emily Chang. (29 August 2019). Uber CEO Says It ’Sure Looked Like’ Levandowski Took Google’s Files. Bloomberg
Rosenblatt, J. and Eric Newcomer. (27 August 2019). Ex-Uber Engineer Levandowski Charged by U.S. in Waymo Case. Bloomberg
Rosenblatt, J. And Eric Newcomer. (9 February 2018.) Uber Agrees to Pay Waymo $245 Million Equity to Settle Suit. Bloomberg
Uber Lawsuit News: 'It Was Obscene': Uber’s 'Safe Rides Fee’ Was Pure Profit To Company, New Book Reveals
August 26, 2019
Author: Daniel Gala
“We boosted our margins saying our rides were safer. It was obscene,” a former Uber employee told New York Times reporter Mike Isaac for his new book about the ride-sharing giant, Super Pumped: The Battle For Uber, an excerpt from which was published by the paper August 23.
As the company faces numerous lawsuits around the world filed by Uber passengers who allege they were the victims of violence and/or sexual misconduct on the part of their drivers, Isaac reports that a $1 surcharge added to each ride, dubbed the “Safe Rides Fee” amounted to a pure profit grab that netted the company as much as $500 million.
“It was April 2014, and Uber was announcing a new $1 charge on fares called the Safe Rides Fee,” Isaac writes. “The start-up described the charge as necessary to fund ‘an industry-leading background check process, regular motor vehicle checks, driver safety education, development of safety features in the app, and insurance.’”
However, according to individuals working for Uber at the time, this description was highly misleading.
“According to employees who worked on the project, the Safe Rides Fee was devised primarily to add $1 of pure margin to each trip. Over time, court documents show, it brought in nearly half a billion dollars for the company, and after the money was collected, it was never earmarked specifically for improving safety,” Isaac reports.
As Uber pocketed the money purportedly collected to pay for “industry-leading” background checks and other passenger safety measures, its drivers have faced a slew of accusations of violent acts, including sexual assault, against passengers. According to an April 2018 report,CNN found that more than 100 Uber drivers had been accused of sexual assault over the past four years.
“You are pretty much hitchhiking with strangers,” one victim told CNN. “How many people is it going to take to get assaulted before something is done?”
Tragically, exactly four years to the month prior the release of CNN’s report, Uber had announced it’s so-called Safe Rides Fee.
Sources:
Isaac, M. (23 August 2019). How Uber Got Lost. The New York Times
O’Brien, S. and Nelli Black, Curt Devine, and Drew Griffin. (30 April 2019). CNN investigation: 103 Uber drivers accused of sexual assault or abuse. CNN Business
Uber Lawsuit News: Couple Sues Uber Over Fatal Altercation With Driver
August 21, 2019
Author: Daniel Gala
On August 2, 2018, Gregory Jonathon “Jon” Strand Jr. and a group of acquaintances called for an Uber to pick them up at the Courtyard Marriott East in Indianapolis. According to a lawsuit filed by Strand and his wife on the one-year anniversary of the incident, when Uber driver Michael Wallace arrived to pick up his passengers, he and the group became engaged in an argument over whether or not Wallace would allow additional passengers into his car, which was against Uber policy.
The Strands’ lawsuit alleges that the dispute escalated to the point where Wallace exited the vehicle, striking Jon Strand multiple times with his fists. It is further claimed that Wallace then pulled a gun from his vehicle.
One of Strand’s associates dialed 911 stating, “We’ve got an Uber driver with a gun,” according to the Louisville Courier Journal.
According to the lawsuit, Strand then disarmed Wallace, placing him in an arm lock and pushing him to the ground. After saying that he could not breathe, Wallace lost consciousness. Multiple individuals in the group attempted to perform CPR, but to no avail. Wallace would pass away in hospital five days later.
Police report having found 43 rounds of live ammunition in Wallace’s car as well as seven rounds in the gun he allegedly had drawn during the incident.
Now, Strand and his wife have sued ride-sharing giant Uber in the latest lawsuit seeking to hold the company accountable for the alleged violent misdeeds of its drivers.
The Strands’ lawsuit cites Wallace’s history of alleged involvement in violent crime as well as his reported use of violent language in arguing that Uber was negligent in ever allowing him to work for the company in the first place. For example, in 2004, Wallace was charged with second-degree wanton endangerment of a police officer, pleading guilty to a lesser charge of menacing. As part of the plea deal, Wallace was restricted from purchasing a firearm for two years.
In 2015, it is alleged in court documents that, following what he considered an offensively small tip, Wallace on Facebook called an Uber rider a “waste of sperm”, adding “Go die!”
“Had Uber been concerned about whether it was appropriate to hire Mr. Wallace, it needed to look no further than his public Facebook profile for adequate evidence that Mr. Wallace was a violent person who should not be trusted with the safety of Uber’s Riders,” the Strands' lawsuit alleges, per the Courier Journal.
Jon Strand claims that following the incident he has suffered from PTSD, which has included night terrors. He also alleges that his marriage and other aspects of his life have suffered as a result.
Source:
Ladd, S. (13 August 2019). Indiana couple sues Uber over fatal fight with Louisville drive. Louisville Courier Journal
Uber Lawsuit News: Uber Quarterly Filing Discloses Wide Scope And Range Of Litigation Facing Company
August 16, 2019
Author: Daniel Gala
With ride-sharing giant Uber Technologies, Inc. having held its highly publicized IPO earlier this year, the newly-public company now is required to submit detailed quarterly disclosures to the United States Securities and Exchange Commission (SEC). Signed off as accurate by the company’s executives under penalty of felony, these filings have required Uber to make public information it previously had kept closely held, exposing the company, its finances, and its business practices to a new level of scrutiny.
While much of the media’s attention pertaining to Uber’s Form 10-Q
for the quarter ended June 30, filed August 8, has focused on the company’s worst-ever $5 billion quarterly loss, the document also contains updated information about the slew of legal troubles in which the company presently is embroiled, largely, it would appear, as a result of its better-to-ask-forgiveness-later-rather-than-permission-now approach to doing business.
Here’s a brief rundown of the legal predicaments Uber has disclosed as of the midway point of its IPO year:
$1.6 Billion Set Aside For Legal Matters, Up $500 Million Since End Of 2018
Deep in the notes of its quarterly filing, Uber discloses that it has increased the amount set aside to deal with legal matters by nearly 50% since December 31, 2018, reaching a total of more than one-and-a-half billion dollars.
“As of December 31, 2018 and June 30, 2019, the Company had recorded aggregate liabilities of $1.1 billion and $1.6 billion, respectively, in accrued and other current liabilities on the condensed consolidated balance sheets for all its legal, regulatory and non-income tax matters that were probable and reasonably estimable,” Uber’s Commitments and Contingencies disclosures state in the jargon typical of such documents.
The $1.6 billion set-aside covers “various legal and regulatory matters that have arisen in the normal course of business and include, among others, alleged independent contractor misclassification claims, Fair Credit Reporting Act (‘FCRA’) claims, background check violations, consumer and driver class actions relating to pricing and advertising, unfair competition matters, intellectual property disputes, employment discrimination and other employment-related claims, Telephone Consumer Protection Act (’TCPA’) cases, Americans with Disabilities Act (‘ADA’) cases, data and privacy matters, and other matters.”
California and Massachusetts Driver Misclassification Claims To Settle For Nearly $200 Million
In its quarterly filing for the period ending June 30, Uber reports that it has resolved employment misclassification claims brought by drivers in California and Massachusetts, which alleged that Uber had improperly classified the drivers as independent contractors rather than employees. In all, settling these claims will cost Uber nearly $200 million, the company says.
The California case, filed in federal district court in 2013, is a class-action claim brought “on behalf of all Driver Partners who contracted with the Company in California between 2009 and February 28, 2019 and seeks damages for tips and business expense reimbursement based on alleged independent contractor misclassification and unfair competition,” in the words of Uber’s quarterly SEC filing. On September 25, 2018, the Ninth Circuit Court of Appeals decertified the class of Uber drivers, finding that Uber’s arbitration agreement, which it offers to all new drivers, was valid and excluding drivers who had signed it from the litigation. The case was sent back to the district court for further proceedings in accordance with the appellate ruling.
Filed in June 2014, the Massachusetts case originally was filed as a class action in state court “on behalf of all Driver Partners in Massachusetts” seeking "damages based on independent contractor misclassification, tips law violations and tortious interference with contractual and/or advantageous relations.”
In March 2019, Uber entered into a widely-reported $20 million settlement to resolve both claims, with the court preliminarily approving the agreement terms following a March 21 hearing. The final approval hearing presently is scheduled to take place August 29, 2019, according to Uber’s filing.
While much media attention at the time focused on how the $20 million settlement figure was so much less than the $100 million settlement proposal that had been rejected by a judge in 2016, in a less-widely-reported piece of news, Uber’s Form 10-Q for the period ending June 30 discloses that the company also has reached a settlement to resolve the claims brought by drivers in California and Massachusetts who are subject to its arbitration agreement and had been barred from taking their claims to court.
According to figures reported by Uber, the company ultimately could stand to pay up to twice that $100 million settlement amount to resolve all claims brought by California and Massachusetts drivers through the courts and arbitration.
“In May 2019, the Company reached agreements to resolve independent contractor misclassification claims of Driver Partners in California and Massachusetts that have filed (or expressed an intent to file) arbitration demands,” Uber’s Form 10-Q states. “Under the agreements, certain Driver Partners are eligible for settlement payments, subject to a threshold number of the covered Driver Partners entering into individual settlement agreements. The Company anticipates the aggregate amount of payments to Driver Partners under these individual settlement agreements, together with attorneys’ fees, will fall within an approximate range of $146 million to $170 million.”
Coupled with the $20 million settlement previously reached with drivers not subject to Uber's arbitration agreement, this makes the high-end of the settlement range roughly $190 million.
Uber Faces A Slew Of Other Legal And Regulatory Matters Around The World. Here’s A Brief Rundown:
California Payroll Taxes. Uber and the State of California continue to battle in the courts over whether the company is responsible for payroll taxes subject to a December 2016 notice “retroactively impos[ing] various payroll tax liabilities on the Company, including unemployment insurance, employment training tax, state disability insurance, and personal income tax,” according to Uber’s SEC filings. The scope of taxes sought by the state highlight why Uber and other gig-economy companies fight so hard to maintain their workers’ status as independent contractors rather than employees, with companies not being required to pay such taxes for independent contractors, potentially saving the companies millions if not billions of dollars.
Denmark Criminal Charges. In an effort to crack down on unlicensed taxi traffic, authorities in Denmark have engaged in a criminal probe in which investigators used the tax records of Uber drivers to detect unauthorized rides. “The prosecutor indicted four Driver Partners as test cases which have been heard by the Copenhagen City Court, the Appeal Court and finally the Supreme Court,” Uber disclosed. “The Company has not operated these services in Denmark since 2017 and currently does not have operations in Denmark.”
Swiss Uber Drivers Classified As Employees For Social Security Purposes. “On July 5, 2019, the Swiss governmental bodies issued four decisions by which they reclassified four drivers as Uber B.V. and Raiser B.V. employees and consider that Uber Switzerland should pay social security contributions,” Uber reported, adding that it “plans to appeal those decisions.” The ruling represents yet another hit globally against Uber’s efforts to maintain that its drivers are mere independent contractors, rather than employees, thereby avoiding the tax and other liabilities that come with the employee classification.
Other Tax Matters. In addition to the matters cited above, Uber also faces significant tax-collection efforts in the United Kingdom, where the tax regulator is seeking to classify the company as a transportation provider, subjecting it to a 20% VAT; and in Tawain, where Uber is contesting government fines imposed on a per-ride basis.
Sources:
Uber Technologies, Inc. (Filed 8 August 2019). United States Securities and Exchange Commission (SEC) Form 10-Q for the period ending June 30, 2019. Note 14 - Commitments and Contingencies
Newcomer, E. (8 August 2019). Uber Tumbles After Posting $5.2 Billion Loss and Weak Sales. Bloomberg
Conger, K. (12 March 2019). Uber Settles Drivers’ Lawsuit for $20 Million. The New York Times
Uber Lawsuit News: Uber Faces Lawsuit Over Alleged Driver Stabbing in Seattle
July 29, 2019
Author: Daniel Gala
The slew of lawsuits against ride-sharing giant Uber over the alleged violent acts of its drivers continued with filing of a lawsuit by a Seattle man and his wife who claim the man was stabbed by an Uber driver in 2017, nearly costing him his life, the Associated Press reported July 23.
According to their federal complaint, plaintiffs Brian Gorme and Adrienne Walker were departing a theater the night of October 1, 2017 when they entered the car of Uber driver Sharif Soajima.
While Soajima was an Uber driver at the time of the incident, police say that he was not the intended driver for the plaintiffs, who apparently entered the wrong vehicle. Police also said that, according to surveillance video, after just seconds inside the vehicle, Gorme exited the car, when he was stabbed by Soajima. Following the stabbing, Gorme was forced to have his spleen removed, spending a week in the hospital.
Soajima, who also goes by the name Timothy Clark, has been charged with assault. He has a prior criminal record, having been convicted of assault and armed robbery in the 1980s. He has been released from custody pending trial, subject to electronic monitoring.
In their lawsuit, Gorme and his wife argue that Uber should not have allowed Soajima to operate as a driver for its ride-sharing service, saying the multi-billion-dollar company was negligent in allowing him to do so.
It is hardly the first lawsuit Uber has faced alleging that it has been negligent in hiring and/or supervising the individuals it employs as drivers. Many of the cases tragically involve allegations of sexual assault. For example, earlier this year, a resident of Washington, D.C. sued Uber for $10 million after her Uber driver pled guilty to sexually assaulting her during an April 2018 incident. In 2017, a Kansas City woman sued Uber, alleging that she was raped by a driver who previously had spent time behind bars on a murder conviction. In that case, the plaintiff alleged that Uber had been warned about the driver’s violent past but had failed to act.
According to an April 2018 report by CNN, at least 103 different Uber drivers in the US had been accused of sexual assault or abuse in the previous four years.
“You are pretty much hitchhiking with strangers,” one alleged victim told CNN. “How many people is it going to take to get assaulted before something is done?”
Sources:
Associated Press (AP). (23 July 2019). Seattle man stabbed by Uber driver sues the company. Associated Press News
Hawkins, A. (1 April 2019). Uber sued for $10 million by woman who was sexually assaulted by her driver. The Verge
O’Brien, S. Et al, (30 April 2018). CNN investigation: 103 Uber drivers accused of sexual assault or abuse. CNN Business
Uber Lawsuit Settlement News: Uber Drivers To Get Minimum Of $20 Under Revised Settlement
July 25, 2019
Author: Daniel Gala
A federal judge in California has given his tentative approval for a revised settlement agreement under which Uber drivers who are member of the plaintiff class would receive a minimum of $20 each rather than just pennies, as would have been the case under terms the same judged blasted as inadequate when presented in May.
The proposed settlement would resolve a class action lawsuit originally filed in 2017 by Uber driver Martin Dulberg, who accused Uber of breach of contract for charging passengers based on both time and miles driven while compensating drivers based only on miles. Dulberg alleged that Uber was keeping the difference in violation of its agreement with drivers.
Despite giving the settlement his preliminary approval, US District Judge William Alsup continued to express misgivings about the settlement amount, calling it “still a low-end recovery for the class,” according to a report by Bloomberg.
“It might be better for the average class member to roll the dice and see if they could hit big with a jury rather than accept a mere twenty or so dollars,” Judge Alsup wrote.
While Alsup did not require further changes to the proposed settlement’s payout terms, he did mandate that class members be informed of the settlement by first-class postage rather than email, as the agreement previously had called for.
The change in minimum payout boosted the total settlement figure to $395,000, an increase of $50,000.
The class action is just one of thousands of lawsuits and arbitration demands filed by Uber drivers against the ride-sharing giant over the terms of their work. Many of these legal actions involve disputes over the multi-billion-dollar public company’s classification of its drivers as independent contractors rather than employees. This classification means that Uber drivers are not afforded the same protections as workers who qualify as employees, such as the right to a minimum wage and the ability to unionize.
Source:
Blumberg, P. (23 July 2019). Uber Drivers Who Sued to Get at Least $20 Each, Not Just 1 Cent. Bloomberg
Uber News: With State Worker Classification Bill Pending, Uber Drivers Take To The Street In San Francisco
July 22, 2019
Author: Daniel Gala
With Assembly Bill 5, which would codify changes to the state’s classification of gig-economy workers, having passed the California State Assembly in May and presently pending before the State Senate, Uber drivers took to the streets in San Francisco on July 19 in a protest of what they argue are the company’s exploitative employment practices. Among the demands pushed by the protesting drivers were the right to benefits afforded to workers classified as employees and the ability to form a union.
“Drivers need a seat at the table as equal partners to chart our path forward. It’s time for Uber and Lyft to do right by us,” read a statement released by driver-advocacy groups Gig Workers Rising and Mobile Workers Alliance, as quoted by Cnet.
Uber drivers across the nation have sued the company alleging violations of labor laws and arguing against the company’s classification of its drivers as independent contractors rather than employees, a classification that saves companies like Uber millions if not billions of dollars while costing workers benefits such as a minimum wage and paid sick leave. With a growing percentage of the population resorting to gig-economy work, the push for greater rights for Uber drivers has ramifications for workers in other sectors, as well.
“We will continue to work collaboratively with our diverse community of drivers—and the legislators who represent them—to improve the quality and security of independent work,” Uber responded in a statement, per Cnet.
Efforts to gather drivers together into class action lawsuits have been stymied by Uber’s practice of encouraging new drivers to sign arbitration agreements, but recently driver advocates have filed tens of thousands of arbitration demands on behalf of drivers. Local municipalities also have taken novel approaches to protecting gig-economy workers, with New York City passing in August 2018 a law requiring that ride-sharing drivers receive a minimum wage. Predictably, that law has been challenged in court by several ride-sharing companies.
Sources:
Morse, A. (19 July 2019). Uber, Lyft drivers stage protest for better working conditions. Cnet
Kerr, D. (30 January 2019). Lyft and Juno sue NYC over driver pay rules. Cnet
Uber News: New Study Refutes Uber’s Claims About Drivers’ Work Preferences
July 8, 2019
Author: Daniel Gala
Roughly half of all workers in the United States and United Kingdom would prefer more traditional work arrangements to so-called gig-economy ones, placing greater value on benefits such as job security, paid sick leave, and income predictability than supposed perks such as greater personal autonomy and scheduling flexibility, according to a new paper published in July by the London-based Centre for Economic Performance.
The findings of author Nikhil Datta amount to a sharp, evidence-backed refutation of several narratives pushed by companies, such as ride-sharing giant Uber, that depict gig-economy workers as willingly selecting their new, more flexible careers because of the advantages these jobs supposedly offer and not out of sheer economic necessity. The paper also rebukes the notion that workers value the freedom of “being their own bosses” over the certainty and security of traditional employment, with the workers surveyed saying they would accept drastically lower pay in exchange for greater long-term job certainty.
Such notions of workers preferring short-term, flexible “gigs” to traditional jobs have played a central role in the strategies employed by companies like Uber as they have sought to defend their business models, which rely heavily on workers being classified as independent contractors rather than employees, denying them protections such as a minimum wage and the ability to form a union for the purposes of bargaining collectively.
The concept of worker preference long has been at the heart of legal strategies, public-relations campaigns, and intensive political lobbying, as Uber and similar companies have tried to paint its workers as seeking out “gigs” for their supposed benefits rather than reluctantly accepting such arrangements out of a lack of other available options.
This question of worker choice is precisely what Datta sought to explore in his research.
“This indicates two possible mechanisms [for the growth in gig-economy workers], one where labour demand conditions for traditional employees are weak, thus pushing workers into accepting more precarious working conditions with lower wages, and another where workers are choosing to trade in pay and security for more flexible and autonomous working arrangements,” he writes. “This paper investigates the extent to which the latter is responsible, and seeks to answer whether labour supply preferences for particular job attributes could be a causal factor in the evolution of the labour market.”
In other words, are workers increasingly being forced into gig-economy work as Uber drivers and the like because they lack alternatives or because they actually prefer these arrangements to more traditional ones?
Perhaps unsurprisingly, Datta’s answer does not jive with the narratives put forward by Uber and other gig-economy employers, which would have the courts, politicians, and the general public believe that their workers prefer being classified as independent contractors even as they sue the companies by the tens of thousands over this very classification.
“Using a mixed logit model I find that workers in both the UK and US value security and traditional employment benefits such as holiday and sick pay far more than hours and location flexibility, autonomy and tax perks,” Datta writes. “Estimates are very similar across the two countries which is unexpected given differences in labour market institutions. While a small proportion of workers place a substantial value on flexibility, an even smaller proportion place a lower value on security.”
Exactly how much do workers value this job security? Datta attempted to answer that question and the answer he got was, quite a lot, actually.
“On average an individual in the UK (US) is willing to give up approximately 55% (44.1%) of their hourly earnings to secure a permanent contract or 37.7% (32.0%) for a one year contract, against a baseline of a one-month contract,” Datta reports.
These extraordinary findings show the extent to which workers are willing to sacrifice hourly rate for long-term employment security, a testament to the employment insecurity a large proportion of workers presently feel. That a worker would be willing to accept one-third less pay for a contract that runs twelve months instead of just one month demonstrates the lack of confidence that worker feels in his or her long-term employment prospects.
It remains to be seen what repercussions, if any, Datta’s revelations about the actual state of the gig-economy work force will have on companies like Uber and their efforts to push a narrative, unsupported by the data, that their workers prefer the lack of employment security these employers refer to without irony as “freedom” and “flexibility”.
Source:
Datta, N. (July 2019). Willing to Pay for Security: A Discrete Choice Experiment to Analyse Labour Supply Preferences. CEP Discussion Paper No 1632. Centre for Economic Performance
Uber News: This Car-Sharing Startup Paid Gig-Economy Workers $250 To Waive Their Right To Sue; Will Companies Like Uber Be Next?
July 4, 2019
Author: Daniel Gala
As readers of TheLawFirm.com know, companies like ride-sharing giant Uber, which openly admits that classifying it’s drivers as independent contractors is a vital component of its business model, have gone to great lengths to prevent courts, lawmakers, and regulators from classifying so-called “gig-economy” workers as employees.
In the case of Uber, this has meant spending millions on lobbying and legal costs in a fervent effort to make sure it is not required to provide its drivers with rights afforded only to workers classified as employees, such as a minimum wage and the ability to unionize.
Uber also has sought to avoid being sued by its drivers in court by urging them to sign arbitration agreements when they join the company. Under these agreements, a driver waives his or her right to sue the company in state or federal court, instead forcing all disputes into binding arbitration proceedings.
For companies like Uber, these arbitration agreements seemed to serve several strategic purposes. First, unlike court cases, arbitration proceedings are one-off decisions that do not create binding precedent that may be legally detrimental in future cases. (For example, if a court were to determine that Uber drivers qualify as employees under the law.)
Second, and more importantly, by having drivers sign arbitration agreements, the company would shield itself from class action lawsuits in which potentially thousands of Uber drivers could have their claims heard as a group. Uber, and many other companies, believed it was unlikely that individual drivers would go through the time and expense of pursuing their own arbitration proceedings.
However, this approach may have backfired, as attorneys have filed tens of thousands of arbitration demands on behalf of Uber drivers across the United States. According to the company’s prospectus, released in the lead-up to its highly anticipated IPO, more than 60,000 individual arbitration demands have been filed by Uber drivers against the company, leading Bloomberg to speculate in a May 2019 headline that “Uber’s Arbitration Addiction Could Be Death by 60,000 Cuts”.
A New Way to Prevent Worker Lawsuits
Now, a little-known startup is employing a new strategy in an effort to snuff out potential class action lawsuits before they even begin. Getaround Inc., which provides a platform for car owners to rent their vehicles, has attempted what amounts to a pre-emptive buyout of some of its workers.
“As lawyers were working on one such [potential class action] case, Getaround preemptively sent dozens of checks to people who have worked with the company, attached to paperwork asking them to sign away their legal rights,” Bloomberg reported July 2. “According to a provision within the documents, depositing the money, even without signing the contract, would count as an agreement to waive their rights to sue. And almost everyone did.”
Critics have decried this strategy, which, according to Bloomberg, previously has proven effective in other industries, as taking advantage of vulnerable gig-economy workers, who typically earn low wages and lack employment and income stability.
“Low-wage workers, who are trying to make ends meet, are especially vulnerable,” Bryan Schwartz, an attorney who serves on the board of the California Employment Lawyers Association, told Bloomberg. “They’re going to sign and take the pittance to waive their claims.”
So far, the strategy appears to have worked for the tech company, albeit on a small scale. In October 2018, while an attorney for ex-Getaround worker Amanda Ponciano was attempting to obtain class action certification, Getaround effectively bought out nearly all of the potential class members for a fraction of what attorneys say they were owed.
“Getaround sent out letters and emails to the 61 people in California who had worked the same job as Ponciano in recent years,” Bloomberg reported. “In the envelope was a check and a message saying the money is theirs if they sign a settlement waiving their right to sue Getaround for anything that happened in the past. It also said they could simply deposit the check to indicate their consent. All but four took the offer.”
The checks reportedly ranged in value from $250 to $9,000 based on factors such as the length of time the worker was with Getaround.
While Getaround reported in a legal filing that it spent $145,000 on these “settlements,” an attorney working for the potential class of Getaround workers told Bloomberg that Getaround owes an estimated $1.6 million in wages and penalties.
Given these results, companies like Uber are likely to take notice.
Sources:
Huet, E. (2 July 2019). Cash This Check for $250, and Sign Away Your Right to Sue. Bloomberg
Khosrowshahi, D., Green, L., and Zimmer, J. (12 June 2019). Open Forum: Uber, Lyft ready to do our part for drivers. San Francisco Chronicle
Rosenblatt, J. (8 May 2019). Uber’s Arbitration Addiction Could Be Death by 60,000 Cuts. Bloomberg
Uber Lawsuit News Update: SF Committee Considers Resolution Supporting State Gig-Worker Bill As Resistance To Uber, Other Tech Giants Mounts
July 1, 2019
Author: Daniel Gala
“It’s also no secret that a change to the employment classification of ride-share drivers would pose a risk to our businesses,” the CEOs of ride-sharing competitors Uber and Lyft wrote in a joint op-ed published June 12 in the San Francisco Chronicle.
The reason this is no secret is because Uber and Lyft have spent untold millions mounting scorched-earth legal defenses, launching far-reaching public-relations campaigns, and funding massive lobbying efforts aimed at maintaining their workers’ status as independent contractor rather than employees. These companies do not aim to hide the fact that affording their drivers basic employment rights such as a minimum wage and the ability to unionize poses an existential threat to their “revolutionary” business models.
However, despite setbacks such as a recent National Labor Relations Board (NLRB) advice memorandum
classifying Uber drivers as independent contractors as it relates to their right to unionize, resistance to the ride-sharing giants’ treatment of their drivers appears to be gaining momentum at a grass-roots level.
For example, on Friday, June 28, San Francisco’s Public Safety and Neighborhood Services Committee held a hearing on a resolution that would declare the city’s support for a state bill aimed at granting greater legal rights and protections to so-called “gig-economy” workers, who traditionally have been classified as independent contractors rather than employees. This distinction has saved companies like Uber and Lyft millions if not billions of dollars while denying their workers basic legal protections such as the right to earn a minimum wage.
The hearing garnered so much attention that, in order to accommodate the large number of public attendees, the city was forced to open an overflow room where individuals could observe the proceedings via live video feed.
At the hearing, more than 20 different Uber and Lyft drivers testified as to the continual strain placed on them by their employers’ policies, reiterating claims made in scores of lawsuits filed by workers and for-hire ground transportation companies across the United States and around the world. Increasingly, citizens and politicians alike are recognizing the strain these policies place not only on ride-share drivers and their families but also on the broader community.
“The only benefit I get with Uber and Lyft is diabetes, high blood pressure, and high cholesterol,” Al Aloudi, a driver for both companies, said at the San Francisco hearing, according to Cnet.
“I feel trapped like one of those caged hamsters running in a wheel,” added ride-share driver Edan Alva, also per Cnet.
The hearing was held to consider a resolution in support of state Assembly Bill 5, which passed the California Assembly in May and now must face a vote in the State Senate. The bill would codify into state law a recent California Supreme Court ruling in the so-called Dynamex case, which revised the legal test used in the state to determine a worker’s employment status.
The test adopted in the Dynamex case, known as the ABC Test, would make it easier for gig-economy workers to qualify as employees rather than independent contractors and would place a greater onus on employers to demonstrate otherwise.
As these battles continue to play out in city halls, state houses, courtrooms, and courts of public opinion across the country and around the world, one thing is certain: the war over worker classification is far from over.
Sources:
Kerr, D. (28 June 2019). San Francisco joins the fight to make Uber and Lyft drivers employees. Cnet
Khosrowshahi, D., Green, L., and Zimmer, J. (12 June 2019). Open Forum: Uber, Lyft ready to do our part for drivers. San Francisco Chronicle
National Labor Relations Board (NLRB) Office of the General Counsel. (16 April 2019). Advice Memorandum. Subject: Uber Technologies, Inc. Cases 13-CA-163062, 14-CA-15883, and 29-CA-177483. NLRB.gov
Uber Lawsuit News Update: Uber Loses Bid To Have Anti-Competition Lawsuit Dismissed
June 28, 2019
Author: Daniel Gala
A California limousine company will be able to proceed with its anti-competition lawsuit against ride-sharing giant Uber, though the plaintiffs failed to meet the legal standards for class-action status, a federal judge in California ruled June 20. The judge allowed the plaintiffs 30 days to amend their complaint to meet the class-action requirements.
Diva Limousine, Ltd. has aimed to sue Uber on behalf of all providers of pre-arranged chauffeured rides in California, but US District Judge Edward M. Chen found that the company had not met the standards for diversity jurisdiction under the federal Class Action Fairness Act, which requires at least one plaintiff from outside the states where Uber is headquartered (California) or incorporated (Delaware).
Diva has alleged that Uber gained an unfair competitive advantage by classifying its drivers as independent contractors rather than employees, allowing the ride-sharing giant to save millions if not billions of dollars by skirting legal requirements such as minimum wage.
“Uber willfully engages in unlawful and unfair business practices by treating its California drivers as independent contractors,” said Aaron M. Sheanin, representing Diva Limousine and the proposed class, per Law360. “Uber must compensate them as employees. We’re pleased that the court is allowing us to move forward on our unfair competition claim, and we intend to litigate the case vigorously.”
In the ruling, Judge Chen also rejected Diva’s request for an order demanding that Uber classify California-based drivers as employees rather than independent contractors, declaring such an order extremely premature and saying the company had failed to cite “specific facts” supporting its claims that such a classification amounted to an anticompetitive practice.
Judge Chen also dismissed Diva Limousine’s claims under California’s Unfair Practices Act, rejecting Diva’s argument that the California Public Utilities Commission has the power to establish Uber’s prices.
“[Diva Limousine] cites no authority no legislative history” to support this contention, Chen said, according to Law360.
While Judge Chen demanded more of Diva Limousine and the proposed class in order for the lawsuit to continue, his offering plaintiffs an opportunity to amend the claims rather than simply tossing the case altogether represents something of a victory in itself. Attorneys for Uber had argued that the lawsuit should be thrown out altogether.
The lawsuit is just one of thousands filed against the ride-sharing giant across the United States and around the world, with plaintiffs including Uber drivers, competing cab and limo companies and their workers, investors, and municipalities, a result of Uber’s “Ask for forgiveness later rather than permission now” approach to entering many markets.
Source:
Atkinson, K. (21 June 2019). Uber Must Face Unfair-Competition Suit For Now. Law360
Uber Lawsuit News Update: NY State Bill Would Grant Uber Drivers, Other Gig Economy Workers Right To Unionize, Little Else
June 24, 2019
Author: Daniel Gala
A bill
introduced in the New York State Assembly June 14 and the New York State Senate June 15 would grant independent contractors such as Uber drivers and other gig-economy workers certain rights presently afforded only to workers classified as employees, including the right to form unions for the purposes of collective bargaining. While heralded by supporters as landmark legislation that could provide a model for other states and even federal law, the bill has been met with sharp criticism from stakeholders on both sides of the issue.
Dubbed the Dependent Worker Act, the bill purports to address the fast-changing employment landscape, which, for better or worse, has been revolutionized in recent years by companies like ride-sharing giant Uber, which rely heavily on so-called “gig-economy” workers that, to date, widely have been classified as independent contractors rather than employees. This classification denies workers basic rights afforded to those classified as employees, such as the right to unionize and to make at least minimum wage.
Almost immediately, the bill was met with criticism not only by companies with business models that rely heavily on gig-economy workers but also by labor-rights activists one might expect to be among the bill’s supporters.
Among the critics were Rebecca Smith, director of the Work Structures program at the nonprofit National Employment Law Project (NELP), who claimed that key stakeholders had been left out of the drafting process.
“The bill is being rushed through the New York State Legislature without hearings and without consultation with affected workers and their representatives,” Smith wrote in a statement posted to the NELP website. “This is not what democracy looks like.”
Some labor leaders concurred. Hector Figueroa, president of SEIU 32BJ, a New York-based union of property-services workers, told Law360 that the Dependent Workers Act would “only give gig workers the right to join a union” while failing to provide other protections afforded employees.
Introduced in the New York Assembly by Assemblyman Marcos Crespo and in the New York Senate by Senator Diane Savino, both Democrats, the Dependent Worker Act would make it the public policy of New York State that all workers possess certain rights regardless of legal classification.
“It is hereby declared to be the public policy of the state to ensure that laborers and other workers who depend for their livelihood on working for others, offering their time, labor and personal services in exchange for hourly wages or other compensation, are timely and fully paid and informed regarding their earnings, without the uncertainty, delay and denial that may result when their employment status is disputed by claims that they are independent contractors rather than employees,” the proposed law states.
Legally, the bill seeks to accomplish this policy objective by defining the term “dependent worker” and amending New York employment law to explicitly include “dependent workers” within the definition of “employee”.
The bill’s definition of “dependent worker” is directly aimed at workers such as Uber drivers and other gig-economy workers. The bill defines a “dependent worker” as “an individual who provides personal services to a consumer of such services through a private sector third-party that: establishes the gross amounts earned by the individual; establishes the amounts charged to the consumer; collects payment from the consumer; pays the individual; or any combination of the preceding.”
Next, the bill would amend certain sections of New York labor law to state that the “term ‘employee shall also include a dependent worker.’”
The bill also calls for the commissioner of labor to hold public hearings with stakeholders to examine other rights potentially to be afforded to gig-economy workers, but, for many labor advocates, this does not go nearly far enough.
“Gig workers, like all workers, deserve good wages, ample social benefits, and the right to come together and bargain with the boss for more. This bill falls far short,” the NELP’s Smith writes in her statement. “While it offers workers important collective bargaining rights, it leaves them starting at zero at the bargaining table.”
Sources:
New York State Assembly. (14 June 2019). Assembly Bill A8343 Dependent Worker Act
Smith, Rebecca. (17 June 2019). New York State’s Dependent Worker Act Falls Short For Gig Workers. National Employment Law Project (NELP) website
Campbell, B. (17 June 2019). NY Lawmakers Propose Gig Worker Bargaining Bill. Law360
Uber Lawsuit News Update: Proposed Federal Class Action Accuses Uber Of ADA Violations
June 17, 2019
Author: Daniel Gala
On June 10, the nonprofit group Disability Rights Advocates and the law firm Carlson Lynch filed in Pennsylvania federal court a proposed class-action lawsuit against ride-sharing giant Uber, alleging that the company has violated the ADA by illegally discriminating against riders who use wheelchairs, CBS affiliate KDKA-Pittsburgh reported.
“Today, Carlson Lynch LLP and Disability Rights Advocates (DRA) filed a class action lawsuit against Uber, challenging the popular ride-sharing service’s failure to make wheelchair-accessible vehicles available in the Pittsburgh area through its rideshare service,” reads a statement posted to the Carlson Lynch website. “The suit, brought by individuals in and around Pittsburgh, Pennsylvania, challenges Uber’s wheelchair accessibility.”
The proposed class action is not the first challenge Uber has faced over its alleged failure to adequately serve riders who use wheelchairs. Disability Rights Advocates also has filed a similar federal lawsuit
against Uber in San Francisco, claiming that ride-sharing companies there similarly have failed to adequately serve passengers with disabilities.
Advocates have expressed concerns that, while ride-sharing services like Uber replace traditional forms of transportation, passengers with disabilities are seeing their transportation options dwindle.
“Our advocacy is focused on making sure that those companies as they’re revolutionizing transportation for lots of people… they’re not leaving behind these people who don’t have a lot of wheelchair options,” Melissa Reiss, an attorney for Disability Rights Advocates who is involved in the California lawsuit, told Bay Area ABC affiliate KGO for a story published in May.
While Uber reportedly has chosen not to respond to requests for comment from multiple news outlets about the ADA lawsuits, its ride-sharing competitor Lyft has gone on-the-record over similar cases, giving a glimpse of what Uber’s potential legal strategy may be.
Lyft reportedly told KGO that it is not required to comply with the ADA because it does not own the vehicles operated by its drivers, adding that its drivers, many of whom operate part-time, could not be expected to undergo the costly upgrades required to equip their vehicles for wheelchair accessibility.
Similarly, Lyft has argued in a New York-based ADA case that it is not a transportation company but a technology company and that it merely provides the tech platform connecting drivers and passengers.
Such arguments parallel those asserted by Uber and Lyft in claiming that their drivers do not qualify as employees but as independent contractors, showing the enormous extent to which the companies’ business models rely on this legalistic, and highly controversial, distinction.
Sources:
KDKA-Pittsburgh CBS 2. (13 June 2019). Lawsuit Claims Uber Discriminates Against Riders Who Use Wheelchairs. Pittsburgh.CBSLocal.com
Carlson Lynch LLP. (11 June 2019). Uber Sued For Discriminating Against Wheelchair-Users. CarlsonLynch.com
Finney, M. and Koury, R. (24 May 2019). Class action lawsuits claim the rideshares discriminate against people in wheelchairs. KGO-San Francisco ABC News 7
Uber Lawsuit Settlement News: Uber, Boston Cab Cos. Say They’ve Reached Settlement Ahead of Trial
June 13, 2019
Author: Daniel Gala
In a joint filing submitted to a Massachusetts federal court late in the evening of Wednesday, June 12, ride-sharing giant Uber and hundreds of Boston-area cab companies said they had reached agreements in principle to resolve six out of seven consolidated lawsuits among the parties. The lawsuits, which accuse Uber of unfair pricing practices that violated local regulations, are presently set to go to trial next month.
In an update provided to the court, Uber and the plaintiff cab companies said that the parties were “working out the details of the settlement agreement and hope to execute that agreement in the coming weeks,” according to Law360.
The lawsuits, originally filed by more than 800 Boston-area taxi companies, accused Uber of acting unlawfully to gain an unfair market advantage. The suits originally featured antitrust claims against Uber, arguing that the company had skirted local rules and used monopoly-style tactics in an effort to drive the competition out of business.
However, U.S. District Judge Nathaniel M. Gordon tossed the antitrust claims in a June 2018 ruling, leaving only the allegations that Uber had violated local ride-hailing regulations before a 2016 state law superseding these restrictions went into effect.
The terms of the tentative settlements were not released publicly.
The one lawsuit out of the seven consolidated suits not to be named in the joint filing involves allegations that the ride-hailing giant essentially operated an “illegal and unlicensed hackney carriage service” by skirting the taxi medallion requirements of local jurisdictions. It appears the sides have yet to reach agreement on a resolution over these claims.
“By ignoring and flouting these requirements, Uber avoided the very substantial expense associated with purchasing medallions and complying with the taxi rules,” the lawsuit, filed in January 2017, alleges, as quoted by Law360. “This enabled Uber to flood the Boston market with thousands of unlicensed taxis, driven by thousands of unlicensed taxi drivers.”
With six of the seven consolidated cases reportedly nearing settlement, it is unclear what will become of the trial’s scheduled start date of July 22.
Source:
Leibowitz, A. (13 June 2019). Uber Nears Deal With Hundreds Of Cab Cos. Ahead Of Trial. Law360
Uber Lawsuit News: Widow Sues Uber For $10M Over Death Of Husband During Altercation With Unlicensed Uber Driver
June 6, 2019
Author: Daniel Gala
On September 2, 2018, 64-year-old Chicago taxi driver Anis Tungekar got into a shouting match with 30-year-old Uber driver Fangqi Lu. Security-camera footage shows Lu then exited his vehicle and physically confronted Tungekar, delivering a roundhouse kick to the older man’s head. In the ensuing fall, Tungekar’s head suffered another blow, striking the ground hard.
Several days later, Anis Tungekar died in the hospital from these injuries.
On June 3, Tungekar’s widow sought some measure of justice for her deceased husband by bringing a lawsuit against not only Lu but also ride-sharing giant Uber over her husband’s death, alleging that the company was negligent in hiring Lu as a driver and allowing him to continue on in that position.
“The offender [Lu] didn’t have a valid driver’s license, he had a known history of violence, and he should have never been on the road, let alone driving for Uber,” Michael L. Gallagher, representing the decedent and his widow Thara Tungekar, told Law360
. “We filed this lawsuit because Uber’s business model is designed to place profit over people. As a result, Uber knowingly allowed a violent individual to continue to act as one of their own drivers, and my client paid with his life.”
The videotaped attack on Anis Tunkegar was not the first violent incident in which Lu was alleged to have been involved. Attorney and Uber passenger Scott Gore previously had reported to Uber and Chicago police that, on July 1, 2018, roughly two months before the fatal altercation with Tungekar, Lu had punched Gore in the head following an argument about Gore’s request for an alternate route to Wrigley Field, where Lu was driving him for a Chicago Cubs baseball game.
“Uber is valued at more than $80 billion with over 60,000 drivers in the United States. The fact that an $80 billion company couldn’t be bothered to pick up the phone to call the original victim, couldn’t be bothered to investigate the attack, or couldn’t be bothered with simply pressing a button to deactivate Lu’s Uber account, is the type of corporate callousness that this family will have to live with for the rest of [their lives],” Gallagher said, per Law360.
The Tungekar family has sued Uber, its subsidiary Raiser LLC, and the driver Lu for a total of $10 million in damages. Lu also faces a criminal arrest warrant for first-degree murder but is believed to have fled to China to escape punishment.
Anis Tungekar’s eldest son Omar released a statement through the family attorney.
“There are regulations that prevent violent and unlicensed drivers from driving a taxi. But Uber gave Lu a platform to bypass those rules and the opportunity to follow up this attack on a passenger by killing my father,” it read in part.
Source:
Albarazi, H. (5 June 2019). Uber Faces $10M Suit Over Driver’s Fatal Assault On Cabbie. Law360
Uber Lawsuit Update: Lawyers For Uber Drivers To Receive $1.2 Million In Atty Fees
June 4, 2019
Author: Daniel Gala
The lawyers representing nearly 10,000 Uber drivers who claimed the ride-sharing giant had breached their contracts by taking a “Safe Rides” fee out of the drivers’ share of passenger fares will receive $1.2 million from Uber in the form of attorneys’ fees, a federal judge in California ruled May 31, according to Law360. The fees are in addition to the $1.9 million that Uber must pay to the plaintiff drivers under a previous ruling.
U.S. District Judge Yvonne Gonzalez Rogers denied the attorneys request for $3.3 million in fees, rejecting their argument that a multiplier was warranted due to the novel nature of the litigation.
“The court does not doubt class counsel’s skill and conviction in litigating this action to a successful judgment on behalf of the class,” Judge Rogers wrote, per Law360. “However, this case involved straightforward contract interpretation. Nothing more.”
What potentially could have been a class of hundreds of thousands of Uber drivers impacted by the pricing scheme was reduced to approximately 9,600 when the Ninth Circuit ruled in separate litigation that drivers who had signed an arbitration agreement with Uber could not participate in class action lawsuits against the company.
Attorneys for the plaintiff drivers cited this as further evidence of why they were deserving of a more substantial payment.
“Even though the Ninth Circuit’s opinion eviscerated the putative class, removing hundreds of thousands of class members from the putative class and reducing the damages at issue from tens of millions of dollars to approximately two million—class counsel did not give up on the litigation (or settle the case for a reduced value),” the attorneys wrote in a motion filed with the court, quoted by Law360 [https://www.law360.com/articles/1165137/attys-for-eviscerated-uber-driver-class-win-1-2m-in-fees]. “Class counsel fought for the class and obtained the most compensation possible.”
However, Judge Rogers clearly did not agree that the attorneys deserved more than the $1.2 million awarded.
Judge Rogers also issued $5,000 incentive awards to each of the named plaintiffs in the case. The plaintiffs had significantly assisted the litigation since its inception in May 2016, the judge explained, including providing depositions and conducting document searches.
The drivers sued after Uber began deducting a $1 “safety” charge from the driver’s share of each ride without properly notifying drivers’ of the change in the manner required under the drivers’ contracts. The charge was implemented to cover expenses related to an increase in safety measures, including more expansive driver background checks, aimed at alleviating rider concerns over a slew of driver-related incidents in recent years.
Source:
Berg, L. (3 June 2019). Attys For ‘Eviscerated’ Uber Driver Class Win $1.2M In Fees. Law360
Uber Update: California Bill Would Classify Uber Drivers, Others As Employees Under State Law
May 31, 2019
Author: Daniel Gala
A piece of legislation seeking to make it state law to classify Uber drivers and hundreds of thousands if not millions of other “gig economy” workers as employees rather than independent contractors has cleared a key hurdle in the California legislature, easily passing the state Assembly on May 29 by a vote of 55 to 11.
As the nation’s most populous state and home to the famed Silicon Valley, which helped spawn the so-called “gig economy” by introducing tech-based business models that rely heavily on classifying broad categories of workers as independent contractors, any rule changes in California could have big ramifications that reach far beyond the state’s borders.
“Big businesses shouldn’t be able to pass their costs on to taxpayers while depriving workers of labor law protections they are rightfully entitled to,” said Assemblymember Lorena Gonzalez, author of the bill and a Democrat representing a district in the San Diego area, according to Law360.
The legislation, known as A.B. 5, comes on the heels of a pivotal April 2018 decision by the California supreme court in the case of Dynamex Operations West Inc. v. Superior Court of Los Angeles, in which the court adopted a new test for determining whether a worker qualifies as an employee or an independent contractor. Significantly, the new test, known as the ABC Test, starts with a presumption that a worker qualifies as an employee, a presumption which must then be overcome by an employer seeking to demonstrate that the worker is an independent contractor.
While the distinction between classification as an employee and an independent contractor can seem legalistic, it can have important real-world effects on both worker and employer. For example, employees are afforded legal protections such as minimum wage and the right to unionize that independent contractors are not.
Labor groups such as the California Labor Federation have voiced strong support for the legislation.
“We commend [Assemblymember Gonzalez] and the members of the Assembly who voted for the bill for their advocacy of fundamental worker protections like a minimum wage, overtime pay, workers’ compensation, unemployment insurance and the right to collectively bargain,” the California Labor Federation said in a statement quoted in part by Law360. “The California labor movement will continue to strongly advocate for this landmark measure as it heads to the Senate.”
Predictably, companies with business models that rely heavily on classifying broad swathes of workers as independent contractors have opposed A.B. 5, saying it threatens innovation.
“Lyft drivers overwhelmingly prefer the freedom of working where, when and how much they want,” Lyft said with regards to the bill’s passing the Assembly, per Law360. “Many are moms, students, seniors or veterans and 75% of them drive less than 10 hours per week.”
While the legislation targets gig economy workers and the companies that employ them, it specifically excludes a number of other professions, including “doctors, dentists, lawyers, architects, accountants, engineers, insurance agents, investment advisers, direct sellers, real estate agents, hairstylists and barbers,” Law360 reported.
Gig economy companies such as Uber and Lyft have been the subject of tens of thousands of lawsuits and arbitration demands bought by workers around the world demanding they be classified as employees rather than as independent contractors. In disclosures to potential investors, both companies have ranked the possibility of its workers being reclassified as employees as one of the risk factors facing their businesses.
Source:
Konnath, H. (30 May 2019). Calif. Bill Reclassifying Contractors Advances After Dynamex. Law360
Uber Lawsuit Update: UK Woman Sues Uber Over Alleged Sexual Assault By Driver
May 30, 2019
Author: Daniel Gala
In the first case of its kind in the United Kingdom, a 33-year-old woman has sued ride-sharing giant Uber over allegations that a driver for the company sexually assaulted her, the British publication The Sun reported May 29 The woman has demanded between £30,000 and £50,000 in damages.
The lawsuit stems from an alleged December 2015 incident in which the woman claims her Uber driver groped her breasts multiple times during a ride to Leeds city center. Her attorneys say that she has suffered humiliation, anxiety, and other mental health problems following the alleged assault and that she should be paid damages for “personal injuries and losses,” per The Sun.
The lawsuit comes amidst Uber’s “Safety Never Stops” campaign, which is aimed at convincing potential Uber riders in the UK that rider safety is “at the heart of everything we do.”
It also comes at a time when Uber is scrambling to salvage its ability to operate within the massive and highly symbolic market that is the city of London. In 2017, Uber lost its London operating license when Transport for London ruled that the company wasn’t “fit and proper” to do business within the city, with safety being one of the regulator’s stated concerns.
Though the lawsuit, featuring an Uber passenger seeking to hold the company liable for the actions of one of its drivers, appears to be the first of its kind in the UK, several such lawsuits already have been filed in other countries, including the United States.
The lawsuits arise from numerous incidents in which mostly female passengers say they have been subjected to sexual misconduct by predominantly male drivers, with allegations ranging from harassment to sexual assault to rape. According to The New York Times, Uber and the nonprofit National Sexual Violence Resource Center examined a total of “212 instances of sexual misconduct that occurred during rides in 2017” with an eye toward increasing passenger safety.
Despite these and other publicized efforts by Uber, one need not look far to find recent examples of the shocking, and ongoing, trend.
On May 13, the New York Times reported that an Uber driver, who also was employed as an assistant professor at Penn State Beaver, was facing charges of harassment, kidnapping, and false imprisonment after he allegedly attempted to lock two female passengers in his car, telling them, “You’re not going anywhere.”
Uber also faces issues with atrocities comitted by individuals posing as Uber drivers. In a particularly horrific incident, on March 29, 21-year-old college student Samantha Josephson got into a car she mistakenly believed to be an Uber ride she had hailed. Her body later was discovered in a wooded area, having been the victim of foul play, according to police.
The lawsuits against Uber brought by alleged victims of the company’s drivers have invoked a legal doctrine known as respondeat superior that holds an employer responsible for the actions of its workers when they are operating within the scope of their employment. To the extent that these cases involve the legal employment relationship between Uber and its drivers, they are related to a host of cases and arbitration demands brought by Uber drivers from the United States to Australia claiming that they are entitled to the rights—such as minimum wage and the ability to unionize—afforded to workers classified as employees.
Despite reaching settlements in some employment-classification lawsuits, including a recent 20 million dollar settlement involving drivers from California and Massachusetts, Uber has remained adamant that its drivers legally fall into the category of independent contractors, which are afforded far fewer protections than employees under the law.
Sources:
Well, T. (29 May 2019). Woman sues Uber after she ‘was sexually attacked by driver’ in landmark lawsuit. The Sun
Garcia, S. (13 May 2019). In Kidnapping Attempt, Uber Driver Told 2 Women ‘You’re Not Going Anywhere,’ Police Say. The New York Times
Zaveri, M. (30 March 2019). College Student Samantha Josephson Found Dead After She Got Into a Car She Mistook for Her Uber, Police Say. The New York Times
Conger, K. (12 March 2019). Uber Settles Drivers’ Lawsuit for $20 Million. The New York Times
Uber Lawsuit Update: Boston Cab Cos. Say Uber Riders Should Be Excluded From Jury Pool In Ride-Sharing Lawsuit
May 28, 2019
Author: Daniel Gala
Attorneys representing the more than 800 Boston taxi companies that have had their cases against ride-sharing giant Uber consolidated argued in federal court on May 22 that Uber riders should be excluded from the potential jury pool, accusing Uber of sending messages to its Boston-area riders designed to influence their opinions on topics central to the matters at issue.
“Knowing that there was an upcoming trial, Uber did nothing to curtail direct communications with [prospective] members of the jury pool,” lawyers for the plaintiff taxi drivers argued, according to Law360. “In fact, Uber intentionally communicated with people who could be in the jury pool on topics that it knew were directly at issue in this case.”
The lawsuits, consolidated in 2017, claim that Uber engaged in predatory and illegal practices when it entered the Boston-area market, circumventing local rules and regulations governing ride-hailing businesses. The cab companies’ lawsuits originally included antitrust claims, but those were tossed in June 2018, leaving only the allegations that Uber had violated local rules in the time before a 2016 state law governing ride-sharing businesses was put into effect.
Uber countered that the cab companies’ efforts to have Uber riders restricted from the jury pool was overly broad and without basis.
“Plaintiffs’ motion would deprive Uber of a representative jury pool from the outset, when the court is perfectly capable of using voir dire to ferret out any actual bias in potential jurors,” attorneys for the ride-sharing giant argued, per Law360.
Lawyers for the plaintiffs say that Uber should have restrained itself from direct contacts with its Boston-area riders related to matters at issue in the case.
“Uber should’ve known that such direct contacts with potential jurors on matters at issue in this case were highly inappropriate,” they argued, according to Law360.
U.S. Judge National M. Gordon has not yet released an order indicating whether Uber riders and/or drivers will be excluded from the pool of prospective jurors.
Source:
Konnath, H. (23 May 2019). Boston Cabbies Say Uber Is Taining Prospective Jury Pool. Law360
Uber Lawsuit Update: SF Judge Dismisses Lyft Driver’s Lawsuit Against Uber But Gives Opportunity To Revise Claims
May 22, 2019
Author: Daniel Gala
A California state court judge in San Francisco has dismissed claims brought by a driver for ride-sharing company Lyft Inc. against rival company Uber Technologies Inc. over alleged improper business practices, citing the plaintiff’s failure to demonstrate a genuine business relationship with potential riders allegedly lost due to Uber’s malfeasance, Bloomberg reported
May 15. However, the ruling, issued by San Francisco Superior Court Judge Mary Wiss, left open the possibility of the plaintiff’s refiling his claims with appropriate amendments.
The lawsuit, originally filed in 2016, centered around practices involved in Uber’s so-called Operation Slog, the internal name given to the company’s plan to attract drivers to its platform. As part of these efforts, Uber has admitted to having its employees hail and then cancel thousands of rides on the Lyft app in an effort to frustrate both Lyft drivers and riders and to diminish confidence in the Lyft platform. In all, Uber employees booked and cancelled over 5,000 Lyft rides as part of Operation Slog. (For its part, Uber accuses workers for Lyft of engaging in similar practices.)
In tossing out the three-year-old lawsuit, Judge Wiss said that plaintiff Ryan Smythe had not shown how Uber’s behavior had harmed him directly. Smythe had argued that spending time pursuing the fake rides set up by Uber employees had caused him to miss out on other, valid customer requests.
Despite the dismissal, the ruling may not mean the end of the case. Judge Wiss’s ruling gave Smythe the opportunity to amend his complaint and re-file his lawsuit.
The case is not the first time that Uber has been sued over the practice of systematically hailing and then cancelling rides on a competitor’s platform in an effort to disrupt service and gain a competitive advantage. In December 2018, now-defunct ride-sharing company Sidecar filed a lawsuit accusing Uber of identical practices.
“Uber sabotaged Sidecar and other rivals with campaigns to submit fraudulent ride requests, the [Sidecar] suit says, then either canceling the rides or using the trips to persuade drivers to work exclusively with Uber,” the San Francisco Chronicle reported
at the time adding, “Lyft made the same accusation against Uber in 2014, and it was largely substantiated at that time.”
Sources:
Burnson, Robert. (15 May 2019). Uber Escapes Lyft Driver’s Dirty-Tricks Lawsuit—for Now. Bloomberg
Said, Carolyn. (11 December 2018). Uber hit with antitrust suit 3 years after former competitor Sidecar went bust. San Francisco Chronicle
Uber Lawsuit Update: Attys For Uber Drivers Seek 25% Of Settlement Amount For “Cutting-Edge” Case
May 17, 2019
Author: Daniel Gala
In a filing submitted May 15, attorneys representing Uber drivers in a class action lawsuit have requested that $5 million of the total $20 million settlement amount be set aside for attorneys’ fees and service awards, an amount the plaintiffs’ attorneys say is standard for the type of case and even more justified in this instance giving the complexity and legal innovation required throughout the litigation.
“This fee request is more than justified by the cutting-edge nature of this case, the skill and creativity used in litigating the issues, the case law made here that has assisted and will assist other workers challenging their misclassification as independent contractors, the unusually high risk taken on by filing the case, and the significant monetary and non-monetary relief obtained for settlement class members,” the filing by the plaintiffs’ attorneys read, per Law360.
The request for attorneys’ fees was filed on behalf of the 14,000 California and Massachusetts Uber drivers involved in the class action lawsuit. The case originally included thousands more drivers, but a court ruling upholding Uber’s arbitration agreement allowed only drivers who explicitly had opted out of arbitration when signing on with Uber to remain as class members.
The class action litigation arose out of allegations that Uber has misclassified its millions of drivers as independent contractors rather than employees. Employees are covered by certain legal protections, such as a minimum wage and the right to unionize, which are not guaranteed to independent contractors.
The outcomes of such employment classification lawsuits potentially could have enormous ramifications not just for ride-sharing companies like Uber and Lyft but for other businesses taking advantage of the so-called "gig economy”, many of which have instituted business models that rely heavily on classifying their workers as independent contractors.
Consequently, such companies have fought hard—and often ruthlessly—to maintain independent contractor status for their workers, expending millions in legal fees and political lobbying in the process.
These efforts paid off earlier this week when “gig economy” businesses scored a big win from the National Labor Relations Board (NLRB), which issued an advisory memo saying that Uber drivers qualified as independent contractors and not employees. In doing so, the NLRB explicitly reversed an Obama-era decision that had looked in part to the economic reality of a worker’s situation in determining his or her employment classification, instead opting to look to the degree of entrepreneurial freedom afforded to the worker.
Under the $20 million settlement, roughly 13,600 California and Massachusetts Uber drivers would receive a little over $2,200 each, after attorneys’ fees and other costs. Additionally, those drivers who represented the class stand to receive service awards of $7,500 and $5,000 for their contributions to the litigation and for the risk they took by allowing their names to be used in representing the class of drivers.
Source:
Chiem, L. (15 May 2019). Uber Drivers’ Attys Seek $5m In Fees In Classification Deal. Law360
Uber Lawsuit Update: For Driver Claims, Default Arbitration Agreements May Cost Uber More In Long Run, Experts Say
May 14, 2019
Author: Daniel Gala
As has become the standard option for many companies in today’s economy, when Uber sought to grow its ranks of drivers, it offered as the default option an arbitration agreement that would govern any disputes that may arise between the ride-sharing company and its workers. Unless a driver specifically chose to opt out of the arbitration agreement, he or she essentially signed away any future right to bring claims against the company in a federal or state court.
The move to make arbitration the default choice was in accordance with conventional business wisdom, which for years has held that arbitration agreements offer many benefits for companies, among them protection from class-action lawsuits, the confidentiality of private proceedings, and the perceived unlikelihood of individuals bringing their own arbitration claims.
However, at least in the instance of the ride-sharing giant, outside experts are beginning to question whether this decision may have backfired.
According to financial disclosures made public in the lead up to the company’s initial public offering (IPO), over 60,000 drivers in the United States alone have brought arbitration claims against Uber. The large number of claims has sounded alarm bells for some outside observers.
“The figure surprised legal experts, who said resolving that many cases would take decades and cost Uber at least $600 million—with no end in sight,” Bloomberg reported May 8. The $600 million estimate is based only on the anticipated costs to Uber of holding the arbitration proceedings and does not include any potential payouts to drivers who prevail in the alternative dispute resolution, meaning the actual total could be far higher.
The situation is particularly ironic, as Uber has expended considerable resources seeking to uphold the arbitration agreements in court and succeeding in doing so.
While Uber has managed to prevent drivers covered by arbitration agreements from joining class action lawsuits and to avoid court decisions that could act as precedent harmful to its business model, the large number of individual arbitration proceedings poses its own issues for the newly-public company.
When companies, particularly those participating in the so-called “gig economy”, encourage workers to sign arbitration agreements, what they really are hoping is that individual claimants will not find it worth their while to bring an arbitration demand, whereas those same claimants may be more likely to participate in a class action lawsuit involving thousands of other class members, attorneys representing such workers say.
Instead, at least with Uber, workers have flooded the company with tens of thousands of individual arbitration demands, making for a situation of much greater complexity and cost than might otherwise have been the case.
“The volume is impossible to deal with from an administrative and legal perspective,” Nancy Cremins, general counsel at Globalization Partners, told Bloomberg, likening the situation facing Uber to “death by a thousand cuts.”
Ultimately, the decision to engage its drivers in arbitration agreements may end up costing the company, which already has failed ever to record a profit in its history, hundreds of millions of dollars as compared to class action lawsuits. In the fierce competition for the future of car-based transportation, with billions being spent by Uber and others on self-driving technology, such a massive miscalculation could prove fatal to the company.
“You’ve got to take these on one at a time, and that seems potentially quite painful for Uber because it becomes a regular expenditure,” Cremins said, per Bloomberg. “It doesn’t give you any business value.”
Source:
Rosenblatt, J. (8 May 2019). Uber’s Arbitration Addiction Could Be Death By 60,000 Cuts. Bloomberg
Uber Lawsuit Update: In Blow To Driver Lawsuits, NLRB Declares Ride-Sharing Workers Independent Contractors
May 14, 2019
Author: Daniel Gala
In a memorandum released May 14, the National Labor Relations Board (NLRB) determined that ride-sharing drivers for the company Uber Technologies, Inc. qualify as independent contractors rather than employees. The determination could have ramifications for millions of ride-sharing drivers across the United States, who now will face a tougher legal challenge in fighting for rights, such as minimum wage and the ability to unionize, that are afforded employees under federal labor law.
The decision also marks the latest effort by the Trump Administration to brand workers in the so-called “gig economy” as independent contractors rather than employees. In January, the NLRB abandoned an Obama-era ruling in favor of one that lowered the bar for employers seeking to classify workers as independent contractors, paving the way for the Uber memorandum, which was dated April 16 but not released until May 14.
The Advice Memorandum comes in response to three separate actions raised by various regions of the NLRB. The first two actions were charged by Regions 13 and 15 in 2015, alleging “among other things, that Uber unlawfully terminated its relationships with drivers who had provided Uber rides under a general tier of service known as UberX,” according to the April 16 memo.
The third action was brought by Region 29 in 2016, claiming “that Uber provided unlawful assistance to or unlawfully dominated a labor organization representing Uber drivers in New York City.”
Applying the newly established (or re-established, depending on one’s perspective) test for worker classification, the NLRB found definitively that in all instances the actions were unwarranted because Uber’s drivers qualified as independent contractors and not employees. Thus, protections against unlawful termination and the right to unionize did not apply.
“Applying the common-law agency test, we conclude that UberX and UberBLACK drivers were independent contractors,” the NLRB memo states. “Accordingly, the Regions should dismiss the charges, absent withdrawal.”
The “common-law agency test” to which the memo refers was re-established in the NLRB’s SuperShuttle decision, which came down in January 2019 and upended a previous 2014 decision involving FedEx workers that had looked to the economic realities of a worker’s situation to determine his or her classification.
“[W]e find that the FedEx Board impermissibly altered the common law test and long-standing precedent, and to the extent the FedEx decision revised or altered the Board’s independent-contractor test, we overrule it and return to the traditional common-law test that the Board applied prior to FedEx,” the NLRB wrote in the January 2019 SuperShuttle decision, which provided the legal basis for the Uber memorandum that followed.
“‘[W]here the common-law factors, considered together, demonstrate that the workers in question are afforded significant entrepreneurial opportunity, [the Board] will likely find independent-contractor status,’” the Uber memorandum quotes the SuperShuttle decision as establishing, relying heavily on this reasoning in making its determination about the status of Uber drivers.
The NLRB’s shift toward favoring independent-contractor status is at odds with the legal momentum in a number of states that account for a large proportion of the nation’s population, among them California and Massachusetts, where state courts have adopted the so-called “ABC Test”, which, unlike the standards applied by the NLRB in its SuperShuttle decision and Uber memorandum, starts with a presumption that workers are employees, a presumption which then must be overcome by employers seeking to classify its workers as independent contractors.
The classification of workers as independent contractors is essential to the business models of many “gig economy” companies beyond ride-sharing companies like Uber and its main rival Lyft, both of which have gone public this year to disappointing results. However, as a growing number of workers find themselves relying on “gig economy” work as their sole source of income and not merely as a “side hustle”, the lack of protections afforded to employees is placing an increased strain not only on those workers and their families but on public resources, as well.
Sources:
National Labor Relations Board Office of the General Counsel. (16 April 2019). Advice Memorandum. Subject: Uber Technologies, Inc. NLRB Website
National Labor Relations Board. (25 January 2019). Decision on Review and Order. SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338. Case 16-RC-010963. NLRB Website
Uber Lawsuit Update: As Drivers Strike Worldwide, Judge Decries Uber Settlement That Would Pay Some Drivers One Cent
May 8, 2019
Author: Daniel Gala
On Tuesday, May 7, a district court judge in California denied final approval of an approximately $350,000 settlement that was intended to resolve a class action lawsuit filed by drivers against ride-sharing giant Uber.
According to Law360, U.S. District Judge William Alsup went so far as to call the proposed settlement “dangerously inadequate”, writing that, under the agreement, some plaintiffs would be giving up their claims for a single cent, while around 1,300 class members would receive a payout that was not worth the cost of administering and mailing the check.
“Whatever the solution, if there is one, further reducing the settlement should be agreed upon by the parties, not imposed by the court,” Judge Alsup said, per Law360. “The parties should please proceed, however, with the awareness that the court already sees the currently proposed low-end settlement as dangerously inadequate.”
The judge further suggested that the parties omit from any future settlement agreement those class members who would receive compensation that was less than the price of postage, leaving those drivers the ability to bring their own individual claims, should they see fit.
The court’s rejection of the proposed settlement came just two days before the much-anticipated and highly publicized Uber initial public offering (IPO), during which Uber’s founders and top brass are expected to cash in to the tune of billions of dollars. Meanwhile, the company has continually squeezed its drivers, reducing the drivers’ share of passenger fares and continuing to insist that its drivers do not deserve the legal protections afforded to regular employees despite their clearly being central to Uber’s business operations.
On Wednesday, March 8, Uber drivers around the world formed a digital picket line, refusing to offer rides in protest of what they say is increasingly poor treatment by the company and in an effort to highlight the disparity between the IPO riches and the day-to-day economic struggles of ride-sharing drivers. Some drivers chose to physically picket Uber offices, and drivers for other ride-sharing companies, such as Lyft, also reportedly participated in the day-long action, according to The New York Times.
The driver strike is hardly the first labor action sparked by Uber and its controversial business practices. Earlier this year, dozens of people were injured in the Spanish cities of Barcelona and Madrid when taxi drivers protesting the influx of ride-sharing drivers using applications such as Uber and Lyft clashed with police. The days’ long protests, which resulted in the shutdown of major highways and other thoroughfares, succeeded in pressuring local leaders to make concessions to the taxi drivers to the detriment of ride-sharing services, The The New York Times reported at the time.
Sources:
Chiem, L. (7 May 2019). Uber Deal With Drivers ‘Dangerously Inadequate,’ Judge Says. Law360
Conger, K. and Xu, V. (8 May 2019). Uber Drivers’ Day Of Strikes Has Muted Start Before Company’s Big I.P.O. The New York Times
Minder, Raphael. (23 January 2019). Madrid Taxi Strike Intensifies After Barcelona Drivers Are Offered Concessions. The New York Times
Uber Lawsuit Update: DOL Issues New Opinion Letter On Gig Economy Workers In Lead Up To Uber IPO
May 8, 2019
Author: Daniel Gala
On the same day that the newly confirmed administrator of the Department of Labor’s (DOL’s) Wage and Hour Division was officially sworn in to her position, the division released a new opinion letter opining on the employment classification of workers operating as drivers for an anonymous virtual marketplace company (VMC). While the opinion letter, of particular interest in the lead up to Uber’s multi-billion dollar initial public offering (IPO), seeks to clarify the status of so-called “gig economy” workers, given its sharp divergence from the laws of several states, the letter may cause more confusion than it resolves.
In opposition to states such as California and Massachusetts, which recently have adopted a legal presumption of a worker’s status as an employee, the DOL opinion letter, issued April 29, comes down solidly on the side of gig economy workers being classified as independent contractors.
The opinion could have ramifications for worker classification litigation throughout the US.
In reaching its determination, the Department of Labor Wage and Hour Division looked to the following principles: the nature and degree of the potential employer’s control; the permanency of the worker’s relationship with the potential employer; the amount of the worker’s investment in facilities equipment, or helpers; the amount of skill, initiative, judgement, or foresight required for the worker’s services; the worker’s opportunities for profit or loss; and the extent of the integration of the worker’s services into the potential employer’s business.
Weighing these factors, the DOL concluded that the “service providers” for the anonymous virtual marketplace company (VMC) seeking the opinion—which, from the facts presented, sounds a great deal like a ride-sharing company with policies similar to Uber’s—qualify as independent contractors, not employees.
“Under the facts described in your letter, we conclude that your client’s service providers are independent contractors, not employees of your client,” the DOL opinion letter, signed by Acting Administrator Keith E. Sonderling, states in response to an inquiry from an attorney for the anonymous VMC. “The facts in your letter demonstrate economic independence, rather than economic dependence, in the working relationship between your client and its service providers.”
While the opinion letter seeks to clarify the status of gig economy workers, the policy expressed by the Labor Wage and Hour Division is contrary to the legal trend in many states, including the nation’s most populous, which also boasts its largest economy and is home to many of the tech giants whose business models rely heavily on their service providers being classified as independent contractors rather than employees.
In last year’s landmark ruling in Dynamex Operations West Inc. v. Superior Court of Los Angeles, the California Supreme Court established a new method for determining the appropriate classification of workers. Rather than focusing on the six factors outlined in the DOL opinion letter to explore the “economic realities” of the worker-company relationship, the California Supreme Court adopted a three-part test that has become known as the ABC test.
Significantly, the ABC test starts with the presumption that a worker is an employee. To overcome that presumption, an employing entity must satisfy all three of the following elements, as described in a piece by Eve Wagner for Law360:
“A. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
“B. The worker performs tasks that are outside of the usual course of the hiring entity’s business.
“C. The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.”
With the DOL opinion letter only exacerbating the gap between federal law and state law in ABC test states, which also include Massachusetts and New Jersey, the legal questions over the employment classification of Uber drivers and other members of the gig economy are not likely to be resolved any time soon.
Sources:
United States Department and Labor Wage and Hour Division. (29 April 2019). FLSA2019-6
United States Department and Labor Wage and Hour Division. (29 April 2019). U.S. Department of Labor Issues New Wage And Hour Opinion Letter, Concludes Service Providers For A Virtual Marketplace Company Are Independent Contractors. News Release
United States Department and Labor Wage and Hour Division. (29 April 2019). Cherly Marie Stanton Becomes New Administrator Of U.S. Department Of Labor’s Wage And Hour Division. News Release
Wagner, E. (7 May 2019). Keeping Up With A Changing Worker Classification Landscape. Law360
Uber Lawsuit Update: Uber Hit With Class Action Lawsuit By Australian Taxi Drivers
May 6, 2019
Author: Daniel Gala
As ride-sharing giant Uber seeks to downplay negative coverage in the lead up to its highly publicized initial public offering (IPO), a class action lawsuit has been filed against the company in Australia on behalf of the country’s taxi drivers and license owners who allege that Uber engaged in illegal practices that cumulatively cost the plaintiffs’ millions in fares.
The law firm that filed the class action suit in Victoria Supreme Court on Friday, May 3 says the damages potentially could run into the hundreds of millions of dollars.
“It will be a landmark case regarding the alleged illegal operations of Uber in Australia and the devastating impact that has had on the lives of hard-working and law-abiding citizens here,” Andrew Watson, national head of class actions for Maurice Blackburn, the firm representing the plaintiffs, said in a statement quoted by Reuters.
The plaintiffs accuse Uber of aggressive tactics that crossed the line into illegality, following “a policy to operate in any market where the regulator had tacitly approved doing so by failing to take direct enforcement action.”
Uber denies any wrongdoing, saying in its own statement that “the claim will be vigorously defended,” according to Reuters, adding, “We will continue our commitment to delivering a great experience to Australians in all the cities where we operate.”
The Australian class action is just the latest lawsuit to be filed against the ride-sharing company by cabbies, for-hire drivers, and the companies that employ them. Uber faces lawsuits all over the world over its aggressive business tactics, with the company repeatedly having been accused of flouting local regulations that apply to other ride-hailing services in an approach reminiscent of the old maxim that sometimes “it’s better to ask for forgiveness than for permission.”
Uber also has been accused of anticompetitive practices, such as operating at steep losses in certain markets with the intent of driving smaller local competitors out of business in order to achieve monopoly status.
Despite Uber’s failing to have ever recorded a profit, the company is seeking a valuation of over $90 billion in its forthcoming IPO.
Sources:
Reuters. (3 May 2019). Uber faces lawsuit by Australian taxi drivers for ‘illegal operations’.
Xu, V. (3 May 2019). Australian Taxi Drivers Sue Uber Over Wages They Say Its Arrival Cost Them. The New York Times
Uber Lawsuit Update: Limo Co. Pushes Back As Uber Tries To Kick Class Action Out of Federal Court
April 30, 2019
Author: Daniel Gala
On Thursday, April 25, the plaintiff limousine company seeking to bring a federal class action lawsuit against ride-sharing giant Uber Technologies Inc. pushed back against Uber’s efforts to have the case dismissed from federal court and sent to California state court, Law360 reported.
After Uber filed a motion to dismiss earlier in the year arguing that the case belonged in state court, limousine company Diva Limousine Ltd. finally got its chance to fire back in court April 25, arguing as to why its proposed class action, which alleges that Uber has engaged in unfair competition across the nation, should remain in the Northern District of California.
The claims Diva Limousine has leveled against Uber include allegations that the ride-sharing giant has misclassified its drivers as independent contractors rather than employees as part of a monopolistic scheme to drive competitors out of business.
In its motion to dismiss, Uber argued that Diva Limousine had failed to establish federal jurisdiction over the matter, arguing that the plaintiff did not meet the standard for diversity jurisdiction because both Uber and Diva Limousine are based in California.
In court April 25, Diva Limousine countered that its proposed class action would include plaintiffs from all over the country, easily satisfying any diversity requirements.
“Although Uber asserts that plaintiff has not alleged minimal diversity, common sense confirms limousine and sedan companies are local in nature, and are generally incorporated in the states where they operate,” attorneys for the California-based limousine service argued, according to Law360. “The complaint’s detailed allegations and the evidence back this up. Numerous class action members are neither citizens of California nor Delaware, where Uber is headquartered and incorporated. Thus, plaintiff easily satisfies minimal diversity.”
In court on January 31, Uber had argued that, under the provisions of the Class Action Fairness Act of 2005 (CAFA), federal class members are required to come from a diversity of jurisdictions, a standard Uber said that plaintiff Diva Limousine had not met, since both the limousine company and Uber have California headquarters.
“A preponderance of the evidence demonstrates that the number of purported California class members far outweighs the paltry number of potential out-of-state class members,” lawyers for Uber argued at the time, according to Law360.
In their chance to fire back on April 25, lawyers for the California limo company repeatedly appealed to the court’s common sense.
“Uber’s theory—that the court only has ‘hypothetical’ jurisdiction, because the complaint does not identify a specific class member who is neither a citizen of California nor Delaware—defies common sense,” Diva’s lawyer added later.
Sources:
Chiem, L. (25 April 2019). Limo Co. Fights Uber’s Bid To Exit Unfair Competition Suit. Law360
Koenig, B. (1 February 2019). Uber Gears Up For An Exit In Unfair Competition Case. Law360
Uber Lawsuit Update: Uber Sued Over Accident In Which Driver Hit Pedestrian
April 27, 2019
Author: Daniel Gala
The latest in a growing trend, the ride-sharing company Uber Technologies, Inc. has been hit with a lawsuit in Charleston, South Carolina by a man who claims he was struck by an Uber driver’s car while walking in downtown Charleston in February 2018, WCSC Charleston reported April 17.
The lawsuit is the second such claim to be filed against Uber this year in Charleston County alone. The estate of a female pedestrian who was struck and killed by an Uber driver in 2017 also brought a lawsuit against the popular ride-sharing company earlier this year.
In the more recently filed case, Jeffrey Gaetke alleges that an Uber driver was traveling at an unsafe speed when the driver’s Honda vehicle struck Gaetke while Gaetke was using a crosswalk in downtown Charleston on February 16, 2018. The complaint alleges that Gaetke suffered serious injuries in the accident, including a broken arm that required three surgical screws to fix and a dislocated shoulder. The filing further claims that Gaetke’s medical bills alone could amount to over $80,000.
Beyond the personal tragedies involved, lawsuits that seek to hold Uber and other ride-sharing companies accountable for the actions of their drivers raise a broad range of legal issues, including whether ride-sharing drivers should be treated as independent contractors or employees under the law and when these drivers should be considered to be acting within the scope of their duties to the ride-sharing company.
The as-yet-unknown outcome of these legal debates will have enormous ramifications for the potential liabilities, and therefore the overall value, of these companies, which have been racing to cash in on multi-billion-dollar IPOs. And the same legal issues apply not just to ride-sharing companies but, more broadly, to many new business models in the so-called “gig economy”.
While much of the debate on whether ride-sharing drivers qualify as employees or independent contractors has been centered around the rights of the workers involved, the two Charleston cases are reminders that the seemingly obscure legal distinction has far reaching ramifications with impacts that extend far beyond Uber, its drivers, and even its customers to the public at large.
Source:
Krueger, N. (17 April 2019). Lawsuit: Uber driver seriously injured pedestrian in 2018 in downtown Charleston crash. WCSC Live 5 Charleston
Uber Lawsuit Update: Disability Rights Advocates Sue Uber, Lyft Alleging ADA Violations
April 16, 2019
Author: Daniel Gala
A nonprofit disability rights organization has sued ride-sharing giants Uber and Lyft, claiming violations of the Americans with Disabilities Act (ADA) for an alleged failure to provide an adequate number of wheelchair accessible vehicles (WAVs). The lawsuits add to the companies’ legal woes as they navigate their highly anticipated initial public offerings (IPOs), with Lyft having officially gone public in March and Uber’s IPO now imminent with the filing of its registration statement in mid-April.
As IPO present of sorts, on March 20, Disability Rights Advocates (DRA) filed a class-action lawsuit against Lyft on behalf of Bay Area residents with disabilities who require WAVs for transportation, The Daily Californian reported. The group filed a similar class-action suit against Uber in October 2018.
The companies have denied any ADA violations.
“We think about accessibility broadly and know that many who were previously underserved by transit and taxis are now able to rely on Lyft for convenient and affordable rides,” a Lyft company spokesperson said, according to the Daily Californian, adding that the company was working actively with municipalities to deliver “innovative, on-demand WAV offerings.”
Advocates for disability rights see it differently. They argue that as ride-sharing has gained in popularity, driving legacy services such as taxi cabs out of business, the number of WAVs available has been in decline.
“Their service is basically unusable for people who use wheelchairs and need wheelchair accessible vehicles,” said Melissa Riess, an attorney for the DRA, per the Daily Californian. “It could be a really important option for people to get around, especially in the Bay Area, which is so car-centric. On behalf of this community, we’ve brought this lawsuit to compel Lyft to fulfill their legal obligations.”
Local political leaders have taken note of the issue, as well, with Berkeley city councilmember Kate Harrison saying of the ride-sharing services, “They’re negatively impacting seniors and the disabled (and) they’re impacting our bus service.”
Source:
Stassinopoulos, Alexandra. (1 April 2019). Lyft, Uber face class-action lawsuits for disability discrimination. The Daily Californian
Uber Lawsuit Update: Uber, Lyft Offer Drivers IPO Bonuses And Company Stock But Won’t Call Them Employees
April 14, 2019
Author: Daniel Gala
With ride-sharing company Uber racing to join its chief competitor Lyft in going public and cashing in on its own highly anticipated initial public offering (IPO), both companies have announced that they will offer cash bonuses and set aside shares for purchase by their long-time drivers.
While these one-time bonuses and the chance to cash them in for shares at the IPO price no doubt are aimed at making drivers feel they are sharing in the companies’ multibillion-dollar collective paydays, at the same time Uber and Lyft continue to wage multimillion-dollar legal and lobbying wars aimed at keeping their drivers classified as independent contractors rather than employees.
As part of the much-heralded Lyft IPO that took place in mid-March, the ride-sharing company offered drivers cash bonuses based on the number of rides completed, with drivers who had completed at least 20,000 rides potentially earning up to $10,000, and $1,000 going to drivers who had completed a minimum of 10,000 rides, according to Law360. Lyft also reportedly set aside 5% of its IPO shares to be purchased by drivers, with the expectation clearly being that drivers then would invest their new bonuses in company stock, which conveniently also would stimulate higher demand, and therefore a higher share price.
Similarly, in a pre-IPO registration statement filed April 11, Uber said it would provide its drivers with “appreciation awards” ranging from has high as $10,000 to as low as $100 and that it also would provide a pool of shares for drivers to buy at the IPO price.
Despite these supposed demonstrations of good faith, Uber and Lyft continue to use their legal and political clout to push for government regulations and court rulings that support their “gig economy” business models, including their skirting of municipal ride-hailing rules and classifying their millions of drivers as independent contractors rather than employees.
These moves are designed not just to give Uber and Lyft a commercial advantage over legacy ride-hailing services like taxis and limousines, they are central, and some would argue essential, to the very business models on which the companies now are seeking to cash in to the tune of billions of dollars, much of which will go to Uber and Lyft’s corporate brass and already-super-rich investor class.
To see how integral the classification of drivers as independent contractors rather than employees is to these ride-sharing companies’ business models, one need look no further than Uber’s registration statement itself, where, under penalty of perjury, the Uber concedes directly that its business “would be adversely affected if drivers were classified as employees instead of independent contractors.”
Sources:
Uber Technologies, Inc. (Filed 11 April 2019). Form S-1 Registration Statement. United States Securities and Exchange Commission (SEC)
Bayles, C. (12 April 2019). As Lyft, Uber Go Public, Driver’s Status Is Still Murky. Law360
Uber Lawsuit Settlement News Update: Judge Approves $20m Uber Driver Misclassification Settlement
March 25, 2019
Author: Daniel Gala
After receiving additional information on areas ranging from attorneys’ fees to the impact of a recent California Supreme Court decision on the plaintiffs’ claims, a district judge overseeing litigation between ride-sharing company Uber Technologies Inc. and its drivers has approved a proposed $20 million settlement resolving claims that Uber misclassified the drivers as independent contractors rather than employees. Under the agreement, Uber will continue to classify its drivers as independent contractors, though the company has agreed to institute changes to its driver deactivation policy.
The settlement covers roughly 11,000 California-based Uber drivers and 2,600 Uber drivers in Massachusetts. A $100 million settlement agreement had been reached among Uber and drivers in California and Massachusetts in 2015, but that agreement subsequently was rejected by the courts.
Though the $20 million settlement involves only about one-fifth the total payout of the $100 million deal, the new agreement covers fewer drivers, meaning that each individual driver stands to receive more money.
The settlement marks the latest milestone in the ongoing legal battles over the so-called “gig economy,” with a growing number of companies classifying workers as independent contractors rather than employees. In April 2018, the California Supreme Court issued a landmark ruling in the case Dynamex Operations West Inc. v. The Superior Court of Los Angeles, declaring a legal presumption that workers are employees rather than independent contractors.
It remains to be seen what the full implications of the Dynamex decision will be, with attorneys for the drivers conceding that “a great deal of uncertainty continues to exist” regarding the ruling’s full ramifications, according to Law360.
“Arguing the impact of Dynamex would also take additional years of litigation, thus significantly delaying any recovery by settlement class members,” they informed the court.
Source:
LaSusa, M. (22 March 2019). Uber’s $20M Driver Misclassification Deal Gets Green Light. Law360
Uber Lawsuit Settlement News Update: Judge Orders Additional Briefings on $20m Uber Settlement With Drivers
March 20, 2019
Author: Daniel Gala
The federal judge in California presiding over litigation brought by Uber drivers alleging the company had misclassified them as independent contractors rather than employees has ordered briefings providing additional information about the proposed $20 million settlement, which was announced in early March. The topics on which U.S. District Judge Edward Chen would like additional information include attorneys’ fees and the potential value of other claims relinquished by the plaintiffs under the deal, according to Law360.
Although the $20 million proposed settlement features a significantly lower overall payout than the $100 million settlement tentatively reached by the parties in 2015, a deal later rejected by a judge and thrown into turmoil by subsequent judicial rulings, the case now involves thousands fewer plaintiffs, meaning the payout per driver actually would be higher than under the previous agreement.
The proposed deal would cover roughly 11,000 California-based Uber drivers and 2,600 drivers in Massachusetts. Only drivers who did not sign an arbitration agreement with Uber have been eligible to remain in the suit.
Beyond questioning whether the $5 million estimate of attorneys’ fees included litigation costs, Judge Chen also has sought information from the parties about how they arrived at their estimated “verdict value” for each claim brought by the plaintiffs, including the projected $54 million the drivers stood to receive over their employment misclassification claims. The judge also sought further evidence on the value of other claims being surrendered by the plaintiffs under the agreement.
Further, Judge Chen has requested that the parties brief him on the potential impact of the relatively recent California Supreme Court decision in Dynamex Operations West Inc. v. The Superior Court of Los Angeles County, which held that workers have a presumption of being employees rather than independent contractors, a ruling that would seem to have strengthened the drivers’ claims.
Under the terms of the agreement, the drivers’ employment status would remain that of independent contractors rather than employees.
The deadline for the parties to submit the requested information to the court has been set as March 20, with a hearing on the proposed settlement scheduled for March 28.
Source:
Atkins, D. (19 March 2019). Judge Wants more Info On Uber’s $20M Misclassification Deal. Law360
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