Uber Lawsuit News and Updates
The latest Uber lawsuit and settlement News Updates.
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.
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.
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.
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.
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.
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.
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.”
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.
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.”
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.
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.
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.
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.
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.
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.
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.”
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.”
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.
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.
Atkins, D. (19 March 2019). Judge Wants more Info On Uber’s $20M Misclassification Deal. Law360
Uber Lawsuit Settlement News Update: Uber Settles NYC Taxi Driver Suits Over Failed Uber T Service
March 19, 2019
Author: Daniel Gala
As Uber Technologies, Inc. continues to tie up loose legal ends in preparation for its highly anticipated initial public offering (IPO), expected to take place sometime this spring, it has settled with seven New York City taxi drivers who had sued the company over its failed Uber T service, which allowed users to hail a New York City taxi cab using the Uber ride-sharing platform.
The settlement includes a total payout of $195,000 to the seven drivers, out of which will be deducted approximately $70,000 in attorneys fees and court costs, Law360 reported March 13. The drives originally had sought class action status for their case but were denied, limiting the case to the seven plaintiffs.
“In plaintiffs' view, had this action not settled, the case likely would have gone to trial," the plaintiff drivers wrote in a publicly released letter, portions of which were quoted by Law360. “Defendants maintain they would have moved for and obtained summary judgment. Either way, a settlement at this point will obviate legal costs that would easily outstrip the amount of the parties' proposed settlement."
The original 2016 claim filed by the seven drivers alleged that Uber had misclassified them as independent contractors rather than employees. The settlement comes just days after Uber settled cases involving similar claims with nearly 14,000 drivers from California and Massachusetts, agreeing to pay out roughly $20 million.
Despite the recent settlements, attorneys representing Uber drivers and other so-called “gig economy” workers have vowed to continue fighting against what they see as abuse and misuse of the employment classification system.
"We continue to have cases pending against Amazon, GrubHub, Lyft, DoorDash, Postmates, Handy and many others that are exploiting their workers through this business model [of classifying workers as independent contractors rather than employees]," Shannon Liss-Riordan, an attorney for Uber drivers in the $20 million settlement, said in a statement following the announcement of that agreement, per Law360. "Because of arbitration clauses, we are fighting many battles to overcome arbitration, and at the same time, we are also pursuing mass arbitrations against many of these companies."
Konnath, H. (13 March 2019). Uber Cuts $195K Deal With 7 NYC Cab Drivers In Wage Suit. Law360
Smith, D.N. (12 March 2019). Uber Strikes $20M Deal In Driver Misclassification Suit. Law360
Uber Lawsuit Settlement News Update: Uber Agrees To Pay $20m To CA, MA Drivers Over Employment Classification
March 19, 2019
Author: Daniel Gala
Uber has agreed to pay approximately $20 million to almost 14,000 drivers in California and Massachusetts to settle claims that the company had inappropriately misclassified the drivers as independent contractors rather than employees, Law360 reported March 12. The settlement also involved changes to Uber’s driver deactivation policy and the company’s sexual harassment reporting mechanisms.
The agreement replaces a $100 million settlement reached between Uber and drivers from California and Massachusetts back in 2015 but which subsequently was rejected by the judge overseeing the litigation over legal technicalities. Later, the Ninth Circuit found Uber’s arbitration agreement with its drivers to be enforceable, reversing a lower court decision and throwing the California class of plaintiffs, many of whom were drivers who had signed an arbitration agreement with Uber, into disarray.
Because the new settlement involves only drivers who did not sign Uber’s arbitration agreement, it covers far fewer drivers, resulting in the significantly lower total payout. However, according to court documents, the new settlement actually will result in significantly higher payouts on a per driver basis, with the average driver receiving approximately $2,200, or nearly six-fold the previous amount, and high-mileage drivers receiving over $6,000 each, more than twice what they stood to receive under the old agreement.
Importantly, the terms of the agreement do not involve any change to the drivers’ employment status, as they will continue to function as independent contractors of Uber. The agreement covers approximately 11,000 drivers in California and 2,600 in Massachusetts.
Smith, D.N. (12 March 2019). Uber Strikes $20M Deal In Driver Misclassification Suit. Law360
Uber Lawsuit News Update: Both Sides Seek Summary Judgment in Fight Between Uber and Boston Cab Companies
March 6, 2019
Author: Daniel Gala
Both Uber and the more than 800 Boston-area taxi companies suing the ride-sharing company have filed motions for summary judgment in consolidated cases over whether or not Uber violated state and municipal laws when it entered the Boston market, Law360 reported March 1.
The taxi companies accuse Uber of being an unlicensed participant in the Boston-area ride-hailing marketplace, which requires a license for operators, from June 2013 to August 2016. The 800-plus taxi companies have filed seven different lawsuits, now consolidated, accusing the company of attempting to circumvent local regulations.
“Discovery has now confirmed that the factual allegations are true and undisputed,” the plaintiffs alleged in a motion for partial summary judgment, according to Law360. “Accordingly, there is ‘no good faith doubt’ that Uber’s unlicensed [peer-to-peer] operations violated the municipal rules.”
Uber counters in its own motion for summary judgment that it at all times has complied with state and local laws and other regulations and that it was, in fact, welcomed by government officials and regulators.
“At every stage, the relevant government officials welcomed Uber’s operations through word and deed,” Uber argued, per Law360. “Plaintiffs may be frustrated that consumers preferred Uber, or that the city and state embraced the new technology, but that in no way renders the competition unfair. Plaintiffs have no basis to force an unwieldy, costly trial simply to attack effective, lawful competition.”
At issue is a 2016 Massachusetts state law intended to lay out the ground rules for transportation network companies (TNCs), such as Uber, who operate within the state. The law created a legal distinction between ride-sharing companies like Uber and Lyft and traditional taxi companies and purported to trump any local regulations covering the same areas.
The same cab-company plaintiffs previously had alleged that Uber had engaged in antitrust practices in an effort to drive the traditional taxi companies out of business, but a judge found in June 2018 that such claims were unwarranted and approved Uber’s motion to have them tossed from the consolidated proceedings.
Chiem, L. (1 March 2019). Uber, Boston Taxi Cos. Duel Over Unfair Competition Suits. Law360
Uber Lawsuit News Update: Uber self driving car kills pedestrian
August 2, 2018
Author: Daniel Gala
On March 18, 49-year-old Elaine Herzberg was walking her bicycle across the street in Tempe, Arizona when she was struck and killed by a self-driving Volvo SUV owned and operated by Uber. Following what was widely reported as one of the first known instances of a pedestrian being killed by a self-driving car operating in public, Uber was quick to settle with the family of the deceased victim, evidently seeking to avoid the extended media attention that would come with a protracted legal fight.
On March 29, Law360 reported that a lawyer for the family had announced that the family had “resolved” the issue, although terms of the assumed settlement were not disclosed. The vehicle was estimated to be traveling at approximately 40 miles per hour when it struck Herzberg. The Volvo SUV that killed Herzberg was in autonomous mode with a human driver behind the wheel.
Following the fatal March 18 accident, Uber voluntarily ceased all public self-driving-vehicle tests in the cities of San Francisco, Toronto, Pittsburgh, and Phoenix while it examines the causes of the incident. Additionally, Arizona Governor Doug Ducey has ordered Uber to suspend tests of self-driving cars on the state’s public roadways.
In a statement, Uber said, “Our hearts go out to the victim’s family. We are fully cooperating with local authorities in their investigation of this incident.”
The accident has been viewed by many observers as a setback not only for Uber’s efforts to develop self-driving technology, but for the industry as a whole. States recently had been showing a strong willingness to allow for expansive testing of self-driving vehicles on public roads. However, following recent incidents, some states may show greater reluctance, or impose greater restrictions on such testing.
At the least, the incident has raised doubts about industry claims that self-driving technology is something of a panacea that will mean the end of car accidents.
Uber Lawsuit News Update: Uber Must Face Breach of Contract Class Action Suit
August 2, 2018
Author: Daniel Gala
A judge in California has ruled that ride-hailing giant Uber must face a class action suit from drivers who allege that the company breached its contract in denying them certain types of pay.
At issue in the case is Uber’s “upfront pricing model,” which charges passengers a projected fare before their ride actually begins, but pays drivers based on the distance and time actually driven. The suit’s central complaint is that this payment model limits drivers’ earnings and constitutes a breach of their employment contract.
The case has been kicking around the courts for some six months, with Uber repeatedly attempting to block it. The recent ruling ensures that the case will proceed.
Neither party indicated what its next legal steps would be.
If you believe you’ve been treated unfairly by Uber or another ride-hailing company, or if you’ve been in an auto accident involving an Uber, Lyft, or other rideshare vehicle, you may have a case.
Uber Lawsuit News Update: National Labor Relations Board Wants to Revive Uber Contract Employee Suit
July 17, 2018
Author: Daniel Gala
The National Labor Relations Board (NLRB) has requested the revival of a proposed class action suit against embattled rideshare giant Uber. The suit accuses Uber of misclassifying driver as independent contractors as a means of unjustly pocketing their tips.
The basis of the request to revive the suit is the NLRB’s insistence that it is illegal for a company to force employees who seek collection action into individual arbitration. Such a law is still in force, according to the NLRB’s amicus brief, even in cases in which employees have had a chance to opt out of any arbitration agreements.
Drivers in the original suit allege that Uber denied them tips, wages, and health insurance because they had been unfairly misclassified as independent contractors rather than as full-time employees.
The NLRB stressed that the National Labor Relations Act holds that all employees have the right to pursue collective litigation, and that employers may not force employees to seek individual arbitration.
Many of the lawsuits facing Uber in courts across the country center on the company’s practice of classifying its employees as independent contractors.
If you’ve been treated unfairly by Uber, or if you’ve been involved in an auto accident involving an Uber vehicle, you may be entitled to compensation.
Uber Lawsuit News Update: Uber Sued for Failure to Outfit Vehicles for Disabled Passengers
July 20, 2018
Author: Daniel Gala
Uber, the ride-hailing giant that has found itself in numerous kinds of legal trouble in several cities and states, has been sued in New York for its alleged failure to outfit its vehicles with ramps or lifts for passengers who do not possess a full range of movement abilities.
The case, filed by the Brooklyn Center for Independence of the Disabled, the Taxis for All Campaign, Disabled Action of Metropolitan New York, and numerous private citizens, alleges that 99.9 percent of Uber vehicles are inaccessible to people in wheelchairs or who have other movement disabilities.
While Uber does have some vehicles with suitable accommodations, plaintiffs in the class action suit allege that the dearth of such vehicles creates unfair delays for disabled Uber users, and thus discriminates against them.
Uber faces court challenges in various cities for its practice of classifying drivers as contractors rather than as employees, for sexual harassment, and for regulatory issues of various kinds. If you have been discriminated against by Uber or another ride service, or if you’ve been in an accident involving an Uber vehicle, you may have a case.
Uber Lawsuit News Update: North Carolina Judge Grants Certification to Uber Drivers in Class Action Suit
July 14, 2018
Author: Daniel Gala
Uber drivers who opted out of an arbitration agreement with the ride-hailing giant may file a collective class action suit, ruled a federal judge in North Carolina. The case rests on whether drivers were misclassified as independent contractors.
The case, to which the judge granted conditional approval, would be filed under the rubric of the Fair Labor Standards Act (FLSA).
An attorney for the plaintiffs, Paul Maslo, stated that he believed between 18,000 and 19,000 members of the class.
At issue is whether Uber, in classifying its drivers as contractors instead of employees, has deprived them of wages, overtime, and certain benefits to which the drivers would be entitled under FLSA. A specific claim is that Uber uses this classification system to avoid compensating their drivers for time spent waiting for fares.
Uber has come under fire in several cities and states for regulatory issues, employment law violations, and sexual harassment.
If you feel you’ve been treated unfairly by Uber, or if you’ve been in an accident that involves an Uber vehicle, contact TheLawFirm.com
Uber Lawsuit News Update: Drivers Urge Judge to Hear Case on Uber’s Controversial Pricing Model
July 6, 2018
Author: Daniel Gala
In a class action suit currently before a California federal court, a group of plaintiffs urged the judge to reject Uber’s attempt to dismiss a suit currently pending against the company for its allegedly unfair pricing model. Uber has argued that the plaintiffs’ case is fundamentally invalid; the plaintiffs insist in no uncertain terms that their case is clear.
In Uber’s “upfront pricing model,” passengers are charged before their ride actually begins. Those charges are determined by what plaintiffs allege to be inflated projections of the time and distance of the actual ride. Drivers receive a portion of the fare, but that portion is calculated by reference to the time and distance actually driven. The discrepancy between the two methods of pricing is at the heart of the suit, which alleges that Uber pockets money that should go to drivers.
Arguments on both sides were heated.
The California suit is one of many Uber currently faces. The ride-hailing company has been taken to task by numerous state and local governments for reasons including unfair compensation, sexual harassment, and regulatory issues.
If you believe you’ve been treated unfairly by Uber or another ride-hailing company, or if you’ve been in a motor vehicle accident that involved an Uber, Lyft, or other rideshare vehicle, you may have a case. Contact the expert attorneys at TheLawFirm.com to learn how we can help you.
Uber Lawsuit News Update: Uber Driver Loses Bid for FLSA Action
June 28, 2018
Author: Daniel Gala
A Florida federal judge has denied an Uber driver’s bid to certify a Fair Labor Standards Act (FLSA) collection action, stating that he had failed to demonstrate that other Uber drivers who had similar concerns wished to join the suit.
The driver, Sebastian A. Rojas, alleges that Uber has not paid its drivers a minimum wage for all of the hours they’ve worked, has not paid overtime, and has improperly classified its employees as independent contractors. Judge Robert N. Scola, Jr., however, ruled that Rojas misunderstands the nature of FLSA class action cases, and has not shown that other Uber drivers are interested in joining his lawsuit.
Rojas filed an affidavit that states that others would join his suit, but has not submitted any additional information about other drivers and has not collected affidavits from other potential plaintiffs.
Rojas is not the first Uber driver to file complaints against ride-sharing giant Uber, which has run into legal difficulties in numerous cities and states over its classification of employees and other practices.
If you or someone you know has been treated unfairly by Uber, or has been injured in an accident involving an Uber or Lyft vehicle, contact TheLawFirm.com.
Uber Lawsuit News Update: Uber Strikes Back against Class-Action Suit Over Driver Wages
June 27, 2018
Author: Daniel Gala
One of the many lawsuits filed against ride-share giant Uber is founded on claims that the company breached its contract in that its “upfront pricing model” actually served to deny drivers the wages they fairly earned. Now, the company is moving to have that suit dismissed.
Uber filed a motion to dismiss the class action suit on the grounds that the plaintiffs misunderstood the contract.
The upfront pricing model charges riders a fee before the ride even begins, but such fares are often calculated on inflated projections of the time and distance of the ride. The suit alleges that Uber calculated its drivers’ shares of the fares based on the actual fare, not based on the fare that the company itself uses to secure the fares. Uber, the suit alleges, pockets the difference in this rigged equation.
Notably, Uber is not denying pocketing the difference. Rather, the company’s motion to dismiss is grounded on an allegation that its drivers misunderstood the contract’s usage of the upfront pricing model.
Central to the class-action suit is the fact that Uber tells drivers they will retain 80 percent of the fares they collect, but that the actual percentage yields turn out to be far lower than that.
If you’ve been stiffed by Uber, or if you’ve been in an accident involving an Uber vehicle, contact TheLawFirm.com. We can help.
Uber Lawsuit News Update: Uber Moves to Discredit Employment Lawsuits
Julne 16, 2018
Author: Daniel Gala
Uber, the troubled ride-sharing company, continues to use every litigation device at its disposal to discredit the lawsuits brought by disgruntled employees. Uber recently filed a brief in federal court that encourages the court to dismiss claims by drivers who assert that they are or were employees proper, not independent contractors.
The grounds for Uber’s current motion state that, since drivers opted out of arbitration, their lawsuits have been invalidated. The suit has been in the courts for four years.
Should Uber drivers past and present be classified in the eyes of the state as employees rather than as contractors, the company could be liable for enormous financial payouts in the form of employee benefits and other compensation.
The cases against Uber are numerous and complex, and the company is fighting them on several fronts.
If you feel that you’ve been cheated out of fairly earned compensation by Uber or another ride-sharing company, or if you’ve been in an accident involving an Uber vehicle, contact TheLawFirm.com.
Uber Lawsuit News Update: Uber Arbitration Misled Workers
June 15, 2018
Author: Daniel Gala
A judge with the National Labor Relations Board (NLRB) has ruled that Uber must rescind or revise a dispute resolution that the company reached with its software engineers. According to the judge, the agreement does not clearly inform employees of their right to file unfair labor charges.
Judge Mara-Louise Anzalone ruled that the dispute resolution wrongfully misleads Uber software engineers to believe that they are unable to file charges with the NLRB, though in fact they legally entitled to do so. At issue was the “legal jargon” in the agreement, which rendered this point particularly unclear.
Uber, the app-based ride-sharing company, has run into a number of legal difficulties at the state and federal level. In particular, numerous cases have been filed pertaining to the company’s unfair treatment and/or classification of its drivers as contractors rather than as employees who are entitled to benefits. The NLRB case presents another angle on Uber’s troubled relationship with its employees.
If you believe you’ve been treated unjustly by Uber, contact TheLawFirm.com.
Uber Lawsuit News Update: NY Uber Drivers Entitled to Employee Status
June 15, 2018
Author: Daniel Gala
Troubled ride-sharing giant Uber has experienced more than its share of legal difficulties in state and federal court. Now, a court in New York has delivered a potentially serious blow to Uber’s firmly held contention that its drivers are not employees but independent contractors.
A judge in New York state’s labor department has ruled that Uber drivers are entitled to receive employee benefits, despite the company’s claim that, since they set their own schedules and were not required to report absences, the company’s drivers are actually contractors.
Companies are not legally obligated to pay employee benefits to independent contractors.
Judge Michelle Burrowes argued that Uber had “exercised sufficient supervision, direction and control” over their drivers for the drivers to be considered, in the eyes of the laws of the state of New York, employees proper. Burrowes cited the company’s requirement that drivers accept at least 90 percent of ride requests.
The case could have ramifications not only for Uber’s bottom line, but for how the company is viewed by regulatory agencies in all of the states in which it operates.
Uber Lawsuit News Update: Uber Fires 20 Employees After Internal Investigation
June 13, 2018
Author: Daniel Gala
The New York Times reports that troubled ride-hailing company Uber has just fired 20 employees after conducting an investigation into its workplace culture. The individuals have not been named.
Still the 900-pound gorilla in the ride-hailing field, Uber has recently seemed vulnerable to threats both internal and external. In numerous American cities – and in numerous courts of law – Uber has run into regulatory and tax difficulties concerning whether its drivers should be classified as employees or as independent contractors. Uber employees past and present have spoken out about a cutthroat workplace culture, and at least one former employee has charged that the company failed to act on the sexual harassment complaint she made.
To address its internal struggles, Uber has contracted with two law firms to conduct investigations and make recommendations. The firings come after a report by the law firm Perkins Coie. Uber has also hired Covington & Burling, the law firm of former U.S. Attorney General Eric Holder, to conduct a further investigation. Covington & Burling’s report has not yet been made public.
If you believe you have a legal complaint against a ride-hailing company, contact us. The consultation is free, and our expert ride-hailing attorneys will help you any way they can.
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