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Uber Lawsuit News and Updates

The latest Uber lawsuit and settlement News Updates.

Uber News: Uber Drivers Reportedly To Get Unemployment Benefits Under $2 Trillion Coronavirus Bill. Where Does This Leave Their Employment Status?

March 30, 2020
Author: Daniel Gala

Thanks to a hard push by congressional Democrats, the $2 trillion-plus coronavirus relief bill that passed the United States Senate by a unanimous vote on March 25 reportedly contains provisions that temporarily will provide unemployment benefits for gig-economy workers like Uber drivers. Such workers typically are classified as independent contractors by their employers, meaning they ordinarily do not qualify for unemployment benefits if terminated or suffering from a significant drop in income. 

While such short-term provisions might provide some measure of momentary relief for the millions of Uber drivers who suddenly find the demand for their services to have plummeted, it highlights a glaring contradiction in the system as it existed prior to the coronavirus crisis: Why should Uber drivers qualify for unemployment benefits now, en masse, when individual drivers suffering similar economic fates—only on a personal scale—have historically been denied them, despite a great deal of litigation challenging this status quo? 

In the United States alone, thousands of Uber drivers have joined lawsuits or filed arbitration demands challenging Uber’s classification of them as independent contractors rather than employees. In addition to unemployment benefits, independent contractor status denies Uber drivers other rights such as minimum wage, overtime pay, the ability to unionize, and—another issue that has become a point of contention in the time of coronavirus—paid sick leave. 

To date, Uber and other gig-economy employers have defended themselves feverishly against any efforts to classify their millions of app-based workers as employees, a move which they say poses an existential threat to their business models. Indeed, analysts estimate that classifying its drivers as employees could cost Uber an additional 20-30% annually in labor costs, which translates into millions if not billions of dollars annually for a company that—despite its massive scale and years of allegedly anticompetitive tactics—famously has struggled to turn a profit.

"I am thankful that the U.S. Senate has ensured that drivers and delivery people—along with all independent workers—will qualify for expanded unemployment insurance under the bipartisan COVID-19 relief package,” said Uber CEO Dara Khosrowshahi, according to CNBC.

Prior to the bill’s passing, Khosrowshahi had written a letter to US President Donald J. Trump and met with other lawmakers, lobbying simultaneously for the government to provide Uber’s drivers with temporary relief while denying them long-term employee status or any of the accompanying benefits. 

"The 1.3 million Americans who drive and deliver with Uber are facing extraordinary economic challenges,” Khosrowshahi said, ignoring that Uber itself has offered very little by way of financial support or physical protection for its workers. "Many are on the front lines of this crisis, keeping their communities moving and getting food to people sheltering indoors. Those who’ve lost the opportunity to earn need and deserve this support.” 

Tellingly, Khosrowshahi continued, "I am committed that Uber will do its part to advocate for new laws that permit companies like ours to provide additional benefits for independent workers going forward,” further pushing the onus onto lawmakers and away from his multi-billion-dollar company, which has spent years of litigation and tens of millions of dollars fighting to prevent its drivers from being classified as employees. 

Sources: 

Feiner, L. (26 March 2020). Gig workers for companies like Uber, Lyft would get unemployment benefits under $2 trillion Senate stimulus bill. CNBC

Crum, A. (9 March 2020). Uber, Lyft to offer paid sick leave to any coronavirus-infected driver. The Mercury News

Uber Lawsuit News: Calif. Federal Court Dismisses Taxi Co.’s Predatory Price Lawsuit Against Uber

March 27, 2020
Author: Daniel Gala

A federal judge on March 25 granted Uber’s request to dismiss a case filed by San Francisco taxi company Flywheel alleging that the multi-billion-dollar ride-share giant has engaged in predatory pricing aimed at driving competitors out of business in order to gain a monopoly in the local ride-for-hire market. However, the judge left the door open for Flywheel, giving the taxi company until April 24 to file an amended complaint on certain of its claims, should it choose to do so. 

The March 25 order, executed by United States District Judge Jeffrey S. White for the Northern District of California, arrived at a slightly different conclusions for the 12 claims alleged by Flywheel in its second amended complaint, though, in the end, he dismissed them all. Largely, Judge White found that Flywheel, also known as DeSoto Cab Company, Inc., failed to remedy problems the court had previously identified with regards to its existing antitrust claims and also did not adequately demonstrate a factual basis for new claims it had raised based on California’s Public Utilities Code (PUC). 

"For the reasons discussed below, the Court GRANTS Uber’s motion to dismiss but will afford DeSoto Cab Company, Inc. ('Flywheel’) one final opportunity to amend,” Judge White wrote.

Sherman Antitrust Claims

In its second amended complaint filed August 19, 2019, Flywheel argued that Uber has violated the Sherman Antitrust Act by using its $25 billion war chest of venture capital funding to operate at significant losses in an effort to gain a monopoly on the ride-for-hire market in San Francisco. 

"UBER’s intent to monopolize the San Francisco Ride-Hail Market and injure competitors has been made clear through the statements of its former CEO Travis Kalanick and UBER’s advertising highlighting its unilateral price war in the San Francisco Ride-Hail Market,” the lawsuit claimed, adding later, "Former UBER CEO Travis Kalanick repeatedly stated in public speeches over the course of more than 5 years that UBER intended to 'destroy’ all of its competitors and made clear that UBER was doing so through below-cost pricing of UberX and UberXL services.”

The complaint continued, "Propped up by billions of dollars in venture capital that allow it to operate at enormous losses due to below-cost pricing, UBER has captured more than 70 percent of the San Francisco Ride-Hail Market…Left unchecked, UBER is likely to succeed in establishing complete domination of the San Francisco Ride-Hail Market by forcing out all competitors through its predatory pricing strategy it has been able to pursue due to $25 billion in investment capital that UBER has obtained.” 

However, in his March 25 order, Judge White agreed with Uber’s argument that the plaintiff Flywheel has failed to demonstrate that Uber’s actions pose a barrier to entry sufficient for it not only to achieve monopoly status but also to maintain it, as the law requires in order for Flywheel to prove its Sherman Act claims. 

"To allege sufficient market barriers, Flywheel must show that new competitors are barred from entering the market and existing competitors cannot 'expand their output’ to challenge Uber’s pricing,” Judge White wrote, quoting the Ninth Circuit decision in Rebel Oil. "In other words, a plaintiff must show barriers to entry and barriers to expansion.” 

"Barriers to entry may include: (1) legal license requirements; (ii) control of an essential or superior resource; (iii) entrenched buyer preferences for established brands; (iv) capital market evaluations imposing higher capital costs on new entrants; and, occasionally, (v) economies of scale,” the court summarized, again citing Rebel Oil. 

Flywheel’s second amended complaint laid out in detail the alleged barriers to entry presently facing potential market entrants, including an estimated $40 million cost simply to enter the San Francisco market and stringent regulations that did not apply to Uber during its crucial first years of operation.

"From September 2013 through April 2016, UBER continued to grow its market share while subject to only minimal regulation,” Flywheel’s lawsuit said. "Not until April 2016 was UBER required to operate under a regulatory framework similar to that which is in place today.” 

The district court rejected both of these arguments as insufficient. 

"Flywheel alleges that new market entrants must comply with regulations that were not in place at the time Uber entered the market,” Judge White wrote. "Yet, crucially, Flywheel does not allege that new market entrants are incapable of complying with those regulations or that the regulations are prohibitively cumbersome.” 

The court used similar reasoning with regards to Flywheel’s claims over the alleged barriers posed by the need for significant capital outlays in order to mount a realistic challenge to Uber’s market domination. 

While the court conceded that Flywheel may be correct about the need for a potential taxicab company or transportation network company (TNC) to raise tens of millions of dollars in order to enter the San Francisco ride-hail market, Judge White noted that "Flywheel has not alleged that this is capital a new TNC company would be unable to raise or that it would be more difficult for a new TNC company to raise this capital than it would be for Uber.” 

Judge White similarly dismissed Flywheel’s data over the contraction of the San Francisco ride-hail market, which Flywheel says is a direct result of Uber’s allegedly monopolistic tactics. 

In its complaint, Flywheel argued that, "At the time UberX and UberXL entered the market in 2012, there existed 36 transportation companies providing ride-hail ground transportation services in San Francisco: 33 taxicab companies and three TNCs. Since 2012, one-third of these companies (11 taxicab companies and one TNC) have been forced to shut down due to their inability to compete with UBER’s prices and their loss of market share due to UBER’s below-cost pricing. As a result, the number of taxicab vehicles available for hire in the San Francisco Ride-Hail Market has also decreased by one-third during that time.” 

However, in his order granting Uber’s motion for summary judgment, Judge White wrote, citing himself, "As the Court has observed in its previous Order, 'Uber’s market success…very likely makes it easier, not harder, for newcomers to the relevant product market to procure capital backing.’ Indeed, Uber points to the entry to the market of competitors ZipCar, Silver Ride, Wings, and ZiroRide…Silver Ride, Wingz, and ZiroRide’s permits are dated 2016, 2017, and 2019 respectively….This suggests that the ride-share market is expanding, not contracting.” 

Judge White’s order did not address the fact that, although these four competitors named by Uber might have joined the market in recent years, according to Flywheel, 12 companies have left it, still making for a net loss of competition overall. Further, one could argue that the supposed competitors named by Uber are not direct competitors. For example, ZipCar offers short-term vehicle rentals, not a ride-hail service. 

Nonetheless, Judge White agreed with Uber’s contention that Flywheel had failed to meet the legal standards necessary to overcome Uber’s motion, and, as a result, ordered Flywheel’s anti-competition claims dismissed. However, Judge White did grant Flywheel one more chance to amend its complaint on some of the Sherman Act claims. 

"Due to difficulties correctly pleading Sherman Act claims, the Court will afford Flywheel one additional chance to amend its allegations in support of Claims One and Two,” the judge ordered.

Public Utility Claims  

In its second amended complaint, Flywheel also presented seven new claims based on alleged violations of California’s Public Utilities Code (PUC). Listed as claims five through eleven of the second-amended complaint, the PUC allegations include (citations to specific PUC sections omitted): 
"(v) failure to charge reasonable rates;
"(vi) providing free or reduced rate transportation; 
"(vii) charging different rates for multiple and single passengers;
"(viii) failure to file rate schedules;
"(ix) transporting passengers without filing rate schedules;
“(x) changing rates without notice or approval;
"(xi) charging rates different than those specified in a schedule.” 

In its motion for summary judgment, Uber argued that Flywheel’s PUC-based claims should be dismissed because it would usurp the authority of the California Public Utilities Commission (CPUC), the public body largely tasked with enforcement and regulation under the Public Utilities Code. The court agreed. 

"The Court next considers whether adjudicating Flywheel’s PUC claim would interfere with the CPUC’s regulatory authority,” Judge White wrote in his March 25 order. “It does not appear that the CPUC has completed constructing regulatory framework for TNCs, including regulations for rate-related concerns. Because rule-making is ongoing, the Court concludes that adjudicating Flywheel’s PUC claims would hinder the CPUC’s exercise of authority.” 

The order continues,"There is no small amount of gray area in the determinations the CPUC has made concerning TNCs like Uber: adjudicating some of Flywheel’s claims very clearly would derogate from CPUC authority, while other claims present a closer question. In the Court’s view, ambiguity in such a circumstance is dispositive.” 

Based on this reasoning, Judge White sided with Uber and dismissed Flywheel’s seven claims based on the Public Utilities Code, though he did give Flywheel one chance to revise its argument on counts four through ten. 

"The Court will afford Flywheel one opportunity to amend Claims Four through Ten, but only to the extent Flywheel can allege facts ’that would not hinder ongoing CPUC supervision and regulation,’” Judge White ordered.

Judge White did not afford such an opportunity to amend with regard to claim eleven, however. 

"Claim Eleven, Flywheel’s intentional interference claim, is dismissed with prejudice,” the order said. “Flywheel has demonstrated it cannot plead facts to support Uber’s acting intentionally to disrupt Flywheel’s relationships with its drivers, and leave to amend this particular claim would be futile.” 

Conclusion

Given that Flywheel already has filed two amended complaints, chances are good that it will perpetuate the instant case by filing a third. In any event, highly litigious Uber will continue to be embroiled in a range of legal entanglements, including thousands of lawsuits and arbitration demands filed by its own driver, as well as cases brought by passengers seeking to hold Uber responsible for the alleged criminal acts of its drivers, including sexual assaults. 

Sources: 

United States District Court Northern District of California. (25 March 2020). Order Granting Motion to Dismiss Second Amended Complaint. Case 4:16-cv-06385-JSW. DeSoto Cab Company, Inc., Plaintiff, v. Uber Technologies, Inc., et al., Defendants

United States District Court Northern District of California Oakland Division. (19 August 2019). Second Amended Complaint. Case 4:16-cv-06385-JSW. Desoto Cab Company, Inc., d/b/a Flywheel Taxi, Plaintiff, vs. Uber Technologies, Inc., et al., Defendants

Uber Lawsuit News: Uber Files Federal Lawsuit Against Los Angeles DOT Over Location Data

March 26, 2020
Author: Daniel Gala

Ride-share giant Uber, demonstrating once again that its appetite for litigation knows no bounds, filed on March 24 a federal lawsuit against the City of Los Angeles Department of Transportation, arguing that the department’s efforts to obtain real-time location data from Uber violates the United States Constitution. 

At issue are requirements imposed by the City of Los Angeles mandating that companies operating rentable electric scooters within its jurisdiction provide the city with real-time data on the scooters’ location. City officials say that this information is necessary to ensure proper enforcement of regulations relating to the scooters’ operation and appropriate parking locations. Uber has argued that the demand to hand over private information amounts to a violation of the Constitution’s Fourth Amendment prohibition on illegal search and seizure. 

“Real-time in-trip geolocation data is not good for planning bike lanes, or figuring out deployment patterns in different neighborhoods, or dealing with complaints about devices that are parked in the wrong place, or monitoring compliance with permit requirements,” said a draft version of Uber’s lawsuit, obtained by CNET prior to its being filed in federal court. “What it is good for is surveillance.” 

City officials counter that Uber does not actually care about privacy but instead has a corporate phobia of any form of government regulation. 

“That fear of data collection as the slippery slope toward full government regulation is very much in the DNA of these companies,” said General Manager of the Los Angeles Department of Transportation Seleta Reynolds, according to the The Wall Street Journal. “It’s because of the history of how they launched and grew up.” 

The lawsuit comes as Uber faced a March 15 deadline to either comply with the regulations or pull its JUMP scooters from the streets of the nation’s second most populous city. Uber has attempted to negotiate with LA officials, for example by offering to provide the data in question 24 hours after the completion of a ride. 

As it has when faced with other municipalities' efforts to impose increased regulation on its notoriously free-wheeling operations, Uber argued that it is not opposed to all regulation per se but that it merely favors the establishment of federal or statewide standards in order to avoid a patchwork of different local rules.  

“We are deeply supportive of building a data sharing standard that can serve all cities without jeopardizing consumer privacy,” said Uber’s chief privacy officer Ruby Zefo, according to CNET. “That way, consumers can be confident that their movements are protected when using our platform, regardless of where they travel or where they live.” 

However, Uber failed to note that such broad-based regulation limits the ability of local officials to shape rules in a way that works best for their communities and is responsive to the needs and desires of their constituents. 

Uber is the only e-scooter company operating in Los Angeles that has refused to provide the requested data. Competitors Lyft, Spin, and Lime all have complied with the city’s data rules. 

That Uber resorted to a lawsuit in an attempt to resolve its dispute with the City of Los Angeles is hardly surprising, as the highly litigious company presently finds itself embroiled in a variety of lawsuits filed by plaintiffs ranging from Uber investors to its own drivers to passengers who allege they were the victims of the criminal acts committed by Uber drivers, including sexual assault, rape, and even a killing. 

Sources: 

Rana, P. and Rundle, J. (25 March 2020). Uber Sues Los Angeles Over Data-Sharing Rules. The Wall Street Journal

Ng, A. (17 March 2020). Uber plans to file federal lawsuit against Los Angeles over location data privacy. CNET

Uber Lawsuit News: Having Fought For Years To Deny Drivers’ Rights, Uber Asks Government To Bail Out Gig Workers Over Coronavirus 

March 26, 2020
Author: Daniel Gala

Embattled ride-share giant Uber—having spent many years and millions of dollars on legal expenses, lobbying costs, and settlements aimed at denying its millions of drivers basic employment rights—is now pushing the federal government to bail out gig workers in light of the precipitous drop-off in passenger demand brought on by social-distancing measures imposed in light of the ongoing coronavirus pandemic. 

By classifying its drivers as independent contractors rather than employees, Uber has saved millions if not billions of dollars in labor costs while denying its drivers rights afforded to workers categorized as employees. These rights include a minimum wage, overtime pay, and the ability to unionize, as well as other rights that have become especially relevant in light of the coronavirus pandemic: paid sick leave and employer-provided healthcare. 

By treating its drivers as independent contractors, Uber also has cost state and local governments millions of dollars in payroll taxes, workers' compensation contributions, and other fees. These millions of dollars would be of particular benefit to cash-strapped municipalities as they deal with the skyrocketing costs of the coronavirus response while simultaneously facing a catastrophic collapse in tax revenues. 

However, none of this has stopped Uber CEO Dara Khosrowshahi from putting out the company’s hand in asking for a piece of the trillion-plus-dollar federal government bailout. 

“I respectfully and urgently request that the economic stimulus you are considering, along with any future legislative measures in response to COVID-19, include protections and benefits for independent workers, not just employees,” Uber’s Khosrowshahi said in a March 23 letter to US President Donald Trump, quoted in part by CNBC. “My goal in writing to you is not to ask for a bailout for Uber, but rather for support for the independent workers on our platform and, once we move past the immediate crisis, the opportunity to legally provide them with a real safety net going forward.” 

Khosrowshahi failed to note how, in “supporting[ing] the workers” on the Uber platform, the federal government would, in effect, be bailing out the company by relieving it of labor costs incurred by many employers who, unlike Uber, do not classify the bulk of their workers as independent contractors. The CEO also omitted that the reason why the company’s drivers require “a real safety net going forward” is that Uber, unlike other employers, has chosen not to provide one for its workers. 

Khosrowshahi did, however, take the opportunity to argue as to why Uber’s millions of drivers should not qualify as employees. 

"Reclassifying these workers as employees could result in the provision of more social protections, but the reality of employment means it would eliminate a key value proposition of this type of work,” CEO Khosrowshahi wrote. “Instead a true flexibility—where workers need not report at a certain time or place, can start or stop working at the tap of a button and can work on multiple platforms simultaneously—driving or delivering would come to resemble the kind of shift-based work that many people cannot fit into their lives.” 

In response, the White House expressed vague support devoid of specifics. 

“As President Trump has said, we are going to ensure that we take care of all Americans, including affected industries and small businesses, and that we emerge from this challenge stronger and with a prosperous and growing economy,” the administration said in a statement to CNBC.

After initially saying it would not provide paid sick leave for workers even in light of the coronavirus pandemic, Uber later backtracked in the face of public pressure, offering up to 14 days of paid sick leave, but only for drivers who had themselves tested positive for the coronavirus or who were under a mandatory quarantine.

Already having faced thousands of lawsuits and arbitration demands filed by drivers challenging their classification as independent contractors, Uber now must contend with a fresh round of legal actions focused on its response to the coronavirus pandemic. In California, a putative class action lawsuit has been filed on behalf of all Uber drivers in the state, arguing that the drivers are employees and that Uber therefore is in violation of state law by not providing paid sick leave. Similarly, in Massachusetts, the Boston Independent Drivers Guild—a group advocating for the rights of ride-share drivers—wrote a letter to the state attorney general urging enforcement of state labor laws with regards to earned paid sick leave.  

In addition to fighting its drivers being classified as employees through the courts, Uber and other gig-economy employers have publicly pledged tens of millions of dollars to back a ballot initiative that would effectively overturn California’s recently-enacted AB 5, a law aimed at classifying most of California’s millions of gig workers as employees rather than independent contractors. 

In his letter to the President of the United States, CEO Khosrowshahi made clear that Uber will continue to pump millions of dollars into efforts to deny its workers fundamental employment rights, while showing no shame about seeking a government handout for expenses other employers are covering for their workers in light of this unprecedented global crisis. 

Sources: 

Feiner, L. (23 March 2020). Uber CEO asks Trump to support gig workers impacted by the coronavirus. CNBC

Boston Independent Drivers Guild (BIDG). (Undated; March 2020). Letter to Massachusetts Attorney General Maura Healey

Barron, E. (13 March 2020). Coronavirus: Lawsuits claim Uber and Lyft endangering public. The Mercury News

Uber Lawsuit News: Siding With UberBLACK Drivers, Third Circuit Reverses Lower Court Dismissal Of Employment Classification Claims

March 25, 2020
Author: Daniel Gala

In a case that could have ramifications for Uber drivers across the United States, the federal Third Circuit Court of Appeals has reversed a lower-court ruling dismissing claims filed by UberBlack drivers who argued that the ride-share giant improperly classifies them as independent contractors rather than employees. The case is of particular significance in that it is the first case of its kind filed against a gig-economy employer to reach the federal appellate courts, according to Bloomberg Law.

“This ruling is a huge blow to Uber’s claim that drivers are independent contractors,” Veena Dubal, an associate professor of law at the University of California Hastings College of Law, told Bloomberg Law. “While this isn’t a final ruling on the issue, the appellate court, in no uncertain terms, made clear that the control that Uber exerts over fare, trips requests, whether to refund or cancel a fare, and the fact that all of this can change without notice weighs in favor of employment status.” 

For its part, Uber aimed to downplay the significance of the ruling. 

“The Third Circuit did not rule that drivers using UberBLACK in Philadelphia should be classified as employees; it merely found that there were fact issues that could not be decided in a summary judgment motion,” Uber said in a statement quoted in part by Bloomberg Law. “We disagree with the Third Circuit’s opinion and we are considering all options.” 

In April 2018, Judge Michael M. Baylson rejected the claims of former UberBLACK driver Ali Razak, who sued in an effort to challenge the company’s deactivating his account after he was convicting of driving under the influence. While the plaintiff Razak argued that such action represented an exercise of control indicative of an employer-employee relationship, the lower-court judge disagreed, granting Uber’s motion for summary judgment and dismissing Razak’s suit

However, in an opinion filed March 3, a three-judge panel of the Third Circuit reversed the lower court’s decision, remanding the case back to the trial court for further proceedings. 

“In reviewing the District Court decision de novo, we determine summary judgment was inappropriate because genuine issues of material facts remained,” the Third Circuit panel concluded. “We do not opine on whether the disputed facts should be resolved by a jury or the District Court…However, these material factual disputes must be resolved.” 

The case is a putative class action brought on behalf “of all persons who provide limousine services, now known as UberBLACK, through Defendant’s Driver App in Philadelphia,” according to the Third Circuit. The lawsuit is brought under the federal Fair Labor Standards Act (FLSA) and Pennsylvania state law, according to which UberBlack drivers argue that they qualify as employees rather than independent contractors. 

“Plaintiffs claim that they are employees, and sue Uber for violations of minimum wage and overtime requirements under federal and state law,” the Third Circuit summarized. “Plaintiffs contend that time spent online on the Uber Driver App qualifies as compensable time under the FLSA. Principal among Plaintiffs’ arguments is that Uber controls the access and use of the Driver App.” 

Uber, as it did in the lower court and as it has in similar cases across the country, on appeal “reasserts that Plaintiffs are not employees as a matter of law, and therefore, their putative class action should be subject to summary judgment,” in the words of the Third Circuit. “To support this contention, Uber portrays UberBLACK drivers as entrepreneurs who utilize Uber as a software platform to acquire trip requests. Uber assets that Plaintiffs are not restricted from working for other companies, pay their own expenses, and on some occasions, engage workers for their own ITCs [independent transportation companies]. They can use UberBLACK as little or as much as they want or choose not to work for UberBLACK and instead work for competitors such as Blacklane and Lyft.” 

However, the Third Circuit ultimately found that there exist triable questions of fact as to whether or not UberBlack drivers qualify as independent contractors or employees, making the summary judgment granted by the lower court improper. 

Applying precedent established in the Ninth Circuit and subsequently applied by the Third Circuit in the so-called DialAmerica case, the appellate panel looked to six factors in determining whether a worker qualifies as an employee under the FLSA. These include: 
“1) the degree of the alleged employer’s right to control the manner in which the work is to be performed;
“2) the alleged employee’s opportunity for profit or loss depending on his managerial skill;
“3) the alleged employee’s investment in equipment or materials required for his task, or his employment of helpers; 
“4) whether the service rendered required special skill; 
“5) the degree of permanence of the working relationship; [and]
“6) whether the service rendered is an integral part of the alleged employer’s business.” 

Applying these six factors, the district court granted Uber’s motion for summary judgment, agreeing with the defendant ride-share giant that there was no dispute of material fact sufficient for the case to proceed to trial. 

“For summary judgment to have been appropriate, there must have been no genuine disputes as to any material facts on the record, entitling Uber to judgment as a matter of law,” the Third Circuit explained. “As such, if there is a genuine dispute of material fact, the question of which DialAmerica factors favor employee status is a question of fact that should go to the fact-finder.” 

(In a jury trial, the jury serves as fact-finder, while in a bench trial, the judge answers questions of both fact and law.)

“Here, the ultimate question of law is whether Plaintiffs are employees or independent contractors, which is for a judge to decide,” the panel continued. “But, if a court finds that there are any issues of fact that remain in dispute, it must resolve those disputes prior to granting summary judgment.” 

Examining the record, the Third Circuit panel concluded that clearly issues of material fact remain in the instant case, making the case an improper candidate for summary judgment. 

“This case presents such genuine disputes of material facts,” the appellate panel found. “Uber submitted a Statement of Undisputed Material Facts to which Plaintiffs responded with almost a hundred pages of disputes. For example, disputed facts include whether Plaintiffs are operating within Uber’s system and under Uber’s rules, and whether Plaintiffs or their corporations contracted directly with Uber.”

Finally, the Third Circuit panel determined that, “[a]lthough the District Court states that its decision derived from undisputed facts, the disputes presented by the parties go to the core of the DialAmerica factors and present a genuine issue of material facts. Accordingly, we will remand to the District Court as summary judgment was inappropriate.” 

While the case now will be sent back to the district court for further proceedings consistent with the appellate ruling, for the Third Circuit to find that issues of material facts exist where the lower court found none is a significant development in litigation over the legal status of Uber drivers and other gig-economy workers. 

“This is a win not only for our clients, but for Uber drivers and gig-economy workers throughout the country,” attorney Travis Lenkner, representing the plaintiffs, told Bloomberg Law. “If Uber couldn’t defend summary judgment for these UberBLACK drivers, it is difficult to imagine how Uber and other gig companies can avoid trial on any of their workers’ misclassification claims. This decision strikes at the heart of these companies’ predatory business model. We look forward to the proceedings in the district court.” 

Thousands of Uber drivers have filed lawsuits and arbitration actions—or have joined class actions—challenging their classification as independent contractors rather than employees. Such classification denies workers categorized as independent contractors rights such as a minimum wage, overtime pay, the ability to unionize, as well as—particularly relevant in today’s world—paid sick leave and employer-provided healthcare. 

Uber and other gig-economy employers for years have fiercely opposed efforts to have the vast majority of their workers classified as employees, viewing the legal status quo as necessary to the execution of its business model. An analysis by Bloomberg Analytics estimates that Uber’s costs per driver would increase by about 20% were they to be treated as employees rather than independent contractors. 

Sources: 

United States Court of Appeals for the Third Circuit. (3 March 2020). Opinion. Ali Razak et al. v. Uber Technologies, Inc. et al. Case No. 18-1944

Daily, K. and Mulvaney, E. (3 March 2020). UberBlack Drivers’ Classification Case Revised by 3rd Cir. Bloomberg Law

Steingart, J. (12 April 2018). Drivers for Uber Black Car Service Aren’t Employees, Judge Rules. Bloomberg Law

Uber Lawsuit News: Having Fought For Years To Deny Drivers’ Rights, Uber Asks Government To Bail Out Gig Workers Over Coronavirus 

March 24, 2020
Author: Daniel Gala

Embattled ride-share giant Uber—having spent many years and millions of dollars on legal expenses, lobbying costs, and settlements aimed at denying its millions of drivers basic employment rights—is now pushing the federal government to bail out gig workers in light of the precipitous drop-off in passenger demand brought on by social-distancing measures imposed in light of the ongoing coronavirus pandemic.   

By classifying its drivers as independent contractors rather than employees, Uber has saved millions if not billions of dollars in labor costs while denying its drivers rights afforded to workers categorized as employees. These rights include a minimum wage, overtime pay, and the ability to unionize, as well as other rights that have become especially relevant in light of the coronavirus pandemic: paid sick leave and employer-provided healthcare.   

By treating its drivers as independent contractors, Uber also has cost state and local governments millions of dollars in payroll taxes, workers' compensation contributions, and other fees. These millions of dollars would be of particular benefit to cash-strapped municipalities as they deal with the skyrocketing costs of the coronavirus response while simultaneously facing a catastrophic collapse in tax revenues.   

However, none of this has stopped Uber CEO Dara Khosrowshahi from putting out the company’s hand in asking for a piece of the trillion-plus-dollar federal government bailout.   

“I respectfully and urgently request that the economic stimulus you are considering, along with any future legislative measures in response to COVID-19, include protections and benefits for independent workers, not just employees,” Uber’s Khosrowshahi said in a March 23 letter to US President Donald Trump, quoted in part by Feiner, L. (23 March 2020). Uber CEO asks Trump to support gig workers impacted by the coronavirus. CNBC. “My goal in writing to you is not to ask for a bailout for Uber, but rather for support for the independent workers on our platform and, once we move past the immediate crisis, the opportunity to legally provide them with a real safety net going forward.”   

Khosrowshahi failed to note how, in “supporting[ing] the workers” on the Uber platform, the federal government would, in effect, be bailing out the company by relieving it of labor costs incurred by many employers who, unlike Uber, do not classify the bulk of their workers as independent contractors. The CEO also omitted that the reason why the company’s drivers require “a real safety net going forward” is that Uber, unlike other employers, has chosen not to provide one for its workers.   

Khosrowshahi did, however, take the opportunity to argue as to why Uber’s millions of drivers should not qualify as employees.   

“Reclassifying these workers as employees could result in the provision of more social protections, but the reality of employment means it would eliminate a key value proposition of this type of work,” CEO Khosrowshahi wrote. “Instead a true flexibility—where workers need not report at a certain time or place, can start or stop working at the tap of a button and can work on multiple platforms simultaneously—driving or delivering would come to resemble the kind of shift-based work that many people cannot fit into their lives.”   

In response, the White House expressed vague support devoid of specifics.   

“As President Trump has said, we are going to ensure that we take care of all Americans, including affected industries and small businesses, and that we emerge from this challenge stronger and with a prosperous and growing economy,” the administration said in a statement to CNBC.  

After initially saying it would not provide paid sick leave for workers even in light of the coronavirus pandemic, Uber later backtracked in the face of public pressure, offering up to 14 days of paid sick leave, but only for drivers who had themselves tested positive for the coronavirus or who were under a mandatory quarantine.  

Already having faced thousands of lawsuits and arbitration demands filed by drivers challenging their classification as independent contractors, Uber now must contend with a fresh round of legal actions focused on its response to the coronavirus pandemic. In California, a putative class action lawsuit has been filed on behalf of all Uber drivers in the state, arguing that the drivers are employees and that Uber therefore is in violation of state law by not providing paid sick leave. Similarly, in Massachusetts, the Boston Independent Drivers Guild—a group advocating for the rights of ride-share drivers—wrote a letter to the state attorney general urging enforcement of state labor laws with regards to earned paid sick leave.    

In addition to fighting its drivers being classified as employees through the courts, Uber and other gig-economy employers have publicly pledged tens of millions of dollars to back a ballot initiative that would effectively overturn California’s recently-enacted AB 5, a law aimed at classifying most of California’s millions of gig workers as employees rather than independent contractors.   

In his letter to the President of the United States, CEO Khosrowshahi made clear that Uber will continue to pump millions of dollars into efforts to deny its workers fundamental employment rights, while showing no shame about seeking a government handout for expenses other employers are covering for their workers in light of this unprecedented global crisis.   

Sources:   

Feiner, L. (23 March 2020). Uber CEO asks Trump to support gig workers impacted by the coronavirus. CNBC  

Boston Independent Drivers Guild (BIDG). (Undated; March 2020). Letter to Massachusetts Attorney General Maura Healey  

Barron, E. (13 March 2020). Coronavirus: Lawsuits claim Uber and Lyft endangering public. The Mercury News

Uber News: Mass. Former Uber Engineer Pleads Guilty To Google Trade Secret Theft

March 24, 2020
Author: Daniel Gala

Once heralded as a pioneer in self-driving car technology, former Google and Uber engineer Anthony Levandowski pleaded guilty March 19 to stealing intellectual property from advertising giant Google, which he then transferred to Uber when the ride-share company purchased his self-driving truck startup.   

As part of his plea agreement with federal prosecutors, Levandowski admitted to taking sensitive documents from Google’s self-driving unit Waymo prior to departing to form his own self-driving truck company, Otto. In exchange for his plea, prosecutors agreed not to ask for more than 30 months of prison time for Levandowski, whose fall from being one of Silicon Valley’s most sought-after engineers—playing a central and highly lucrative role in building what many expect to be the transportation technology of the future—to a disgraced convict has become one of the tech world’s most notorious scandals.  

“I downloaded these filed with the intent to use them for my own personal benefit, and I understand that I was not authorized to take the files for that purpose,” admitted Levandowski, according to court documents quoted by Reuters.   

Levandowski risked significant prison time if convicted on all charges. The United States Department of Justice indicted Levandowski on 33 different counts, each of which carried a possible maximum sentence of 10 years. The plea agreement entailed Levandowski admitting guilt on only one count.   

“We hope that this plea will allow him to move on with his life and focus his energies where they matter most,” said Levandowski’s lawyer, according to Reuters, referring to his client’s reputation for developing ground-breaking new technology.   

For its part, Uber has been accused of knowingly appropriating Waymo’s technology when it purchased Levandowski’s company Otto for roughly $600 million. Google and Waymo sued Uber over the alleged taking of their intellectual property, and, in February 2018, the parties settled the matter, with Uber agreeing to pay $245 million in equity to Google’s parent company Alphabet, Gizmodo UK reported at the time.  

The evidence of Uber’s knowledge—if not direct complicity in the scheme—was compelling, according to media reports.   

“Uber’s former CEO Travis Kalanick held regular meetings with the Otto team before the company was officially formed, and Uber’s due diligence investigation into Otto seemed designed to whitewash the deal,” Gizmodo UK reported.  

The Levandowski affair is not the only time that Uber has been accused of stealing intellectual property. In a still-active lawsuit, the plaintiff accuses Uber co-founder and former CEO Kalanick and others of stealing his idea for ride-share company and the technology behind it.  

The embattled multi-billion-dollar ride-share giant has found itself embroiled in serious litigation on numerous fronts, with plaintiffs ranging from passengers seeking to hold the company accountable for the alleged criminal acts of its drivers—including claims of sexual assault; to Uber drivers challenging their classification as independent contractors rather than employees; to municipalities seeking to curb Uber’s highly-aggressive growth strategies; to Uber’s own investors, who claim that company brass lied in the run-up to its highly anticipated yet largely disappointing spring 2019 IPO.   

Already, Uber drivers and their advocates are taking steps to challenge the company’s handling of the coronavirus crisis, which critics say endangers the health of drivers, passengers, and the public at large while risking further spread of the deadly virus. In Massachusetts, the Boston Independent Drivers Guild—a group advocating for the rights of ride-share drivers—recently wrote a letter to the state attorney general urging legal action to ensure paid sick leave for ride-share drivers, as well as retroactive pay for past paid sick leave. In California, a putative class action lawsuit has been failed on behalf of all Uber drivers in the state, similarly arguing that Uber has been derelict in failing to provide paid sick leave to its drivers.  

Sources:   

Dave, Paresh. (19 March 2020). Former Uber self-driving head Levandowski agrees to plea deal over Google secrets. Reuters  

Conger, K. and Couts, A. (9 February 2018). Waymo, Uber Settle Lawsuit Over Automated Vehicle Trade Secrets. Gizmodo UK  

Boston Independent Drivers Guild (BIDG). (Undated; March 2020). Letter to Massachusetts Attorney General Maura Healey  

Barron, E. (13 March 2020). Coronavirus: Lawsuits claim Uber and Lyft endangering public. The Mercury News

Uber Lawsuit News: Mass. Uber Drivers Urge State AG To Act On Paid Sick Leave

March 24, 2020
Author: Daniel Gala

With the spread of the novel coronavirus posing unprecedented challenges to public health and the economy around the globe, the issue of gig-economy employers such as ride-share giant Uber classifying millions of their workers as independent contractors rather than employees has taken on new significance with implications extending far beyond the employer-worker relationship. As government officials and public-health experts urge individuals who are showing symptoms of the coronavirus to stay home from work and self-isolate, the society-wide ramifications of gig-economy workers’ lack of employer-provided health insurance and paid sick leave have become starker than ever.   

Already feeling the economic impact and foreseeing even greater difficulties to come, some Uber drivers have begun pushing for urgent action from their elected officials. In Massachusetts, the Boston Independent Driver Guild (BIDG)—which describes itself as “an independent organization of rideshare drivers for Uber and Lyft”—sent in mid-March a letter to state Attorney General Maura Healey arguing that ride-share drivers’ employment status poses an immediate health risk to both those drivers and the public at large.  

“As many of the thousands of drivers in the state of Massachusetts live paycheck-to-paycheck already, the coronavirus pandemic puts drivers in an increasingly precarious position,” says the BIDG letter, signed by executive director Henry De Groot. “Currently, we must decide between risking our health and the health of our passengers to continue driving or to forgo work and be unable to pay our bills, keep up with our rent or mortgages, and buy food for our families.”   

In light of the current circumstances, the BIDG urges AG Healey to take action under Massachusetts employment law, first by requesting that courts impose an injunction “to grant statutory earned paid sick leave to qualifying drivers” and, second, by seeking damages “for violations of employment law over the previous period.”  

While the circumstances involving the coronavirus are new and have brought a greater level of urgency to the issue, the question of Uber drivers’ employment classification is one that has been litigated for years. For their part, Uber and other gig-economy employers argue that the majority of their workers are properly categorized as independent contractors who are, legally if not factually, operating their own personal businesses, which merely partner with companies like Uber via their app-based platforms.   

Thousands of Uber drivers, however, have filed lawsuits and arbitration demands arguing that, to the contrary, they should be classified as employees, a distinction which would afford them a host of additional rights and protections, including minimum wage, overtime pay, the ability to unionize, and, of particular significance of late, paid sick leave.   

“Because we lack employee status, we are unable to access earned paid sick leave,” the BIDG letter says.   

While initially saying it would offer drivers no form of paid sick leave, even in light of the coronavirus pandemic, Uber quickly reversed positions, offering some limited concessions such as 14 days paid sick leave, but only for drivers who personally tested positive for coronavirus . The BIDG argues that these measures fall far short of what is needed to adequately protect drivers, passengers, and the public, and even what state law requires.   

“While the TNC [Transportation Network Company] companies [sic] have offered paid leave to drivers who test positive for coronavirus, or are ordered to quarantine, this policy does not cover elderly drivers or others at high risk, and it does not allow drivers to take paid sick time to care for family members,” the BIDG letter says. “Finally, with a lack of tests, many sick drivers will have trouble being tested at all.”   

The BIDG further notes that, because they are classified as independent contractors, Uber drivers are unable to qualify for unemployment benefits despite many losing most if not all of their income due to the sudden, precipitous drop in ride-share demand.   

“Additionally, as demand for rides declines because of the pandemic, even healthy drivers are increasingly unable to earn a living, and we fear this situation will only grow worse,” the letter warns. “Therefore drivers, like many other workers, face an impending economic crisis. However, unlike statutory employees, drivers cannot access unemployment benefits and will not qualify for any employment-based stimulus if they continue to be misclassified.”   

The BIDG is not the only driver advocate attempting to use the law to protect Uber drivers—and the public—during these precarious times. In California, around the same time as the BIDG sent its letter to the Massachusetts AG, a putative class action lawsuit was filed on behalf of all Uber drivers in the state. Like previous suits of its kind, the class action argues that Uber drivers qualify as employees rather than independent contractors. However, the new lawsuit—like the BIDG letter—focuses on the issue of paid sick leave.   

“Faced with the choice of staying home without pay and risking losing their access to their livelihood, including housing, food, and other necessities of living, [Uber] drivers across California will continue working and risk exposing hundreds of riders who enter their car on a weekly basis to this deadly disease,” alleges the California putative class action, as quoted in a March 13 report by Silicon Valley’s The Mercury News.   

Sources:   

Boston Independent Drivers Guild (BIDG). (Undated; March 2020). Letter to Massachusetts Attorney General Maura Healey  

Ma, A. (19 March 2020). Advocates for Uber and Lyft Drivers Urge Legal Action As Coronavirus Response Saps Ridership. WBUR  

Barron, E. (13 March 2020). Coronavirus: Lawsuits claim Uber and Lyft endangering public. The Mercury News  

Cavaliere, V. (9 March 2020). Uber to offer drivers 14 days sick leave if they fall ill with coronavirus. CNN Business

Uber Lawsuit News: Calif. Uber Drivers Seek Class Action Over Company’s Coronavirus Response

March 15, 2020
Author: Daniel Gala

A putative class action lawsuit filed on behalf of Uber drivers in California accuses the multibillion-dollar ride-sharing giant of violating state law in its response to the coronavirus pandemic, casting new light on yet another area in which Uber’s insistence on classifying its drivers as independent contractors rather than employees potentially infringes on public safety and wellbeing.  

“Faced with a choice of staying home without pay and risking losing their access to their livelihood, including housing, food, and other necessities of living, [Uber] drivers across California will continue working and risk exposing hundreds of riders who enter their car on a weekly basis to this deadly disease,” the lawsuit alleges, according to The Mercury News, which reported the lawsuit on March 13.  

While Uber has announced certain measures aimed at addressing the spread of the novel coronavirus, an attorney representing Uber drivers and other gig-economy workers says that the company’s plans fall short not only of public-health needs but also of state-law requirements and expert recommendations.  

“[Uber’s] policies do not address the crisis we are facing,” attorney Shannon Liss-Riordan, who filed the putative class action on behalf of California Uber drivers and has represented gig-economy workers in numerous other cases, told The Mercury News. “California law mandates paid sick leave—and you don’t need to be diagnosed with the coronavirus to be eligible for it.”  

In a sudden about-face from its position expressed as late March 3 just days later that it would provide paid sick leave of up to 14 days for drivers, but only those who have tested positive for coronavirus.  

As attorney Liss-Riordan points out, coronavirus testing has been far from widely available in the US to date, posing a major hurdle for drivers seeking compensation and falling short of recommendations issued by the Centers for Disease Control and Prevention (CDC).    

“Testing for the virus is hard to get now, so few drivers are even eligible for whatever compensation Uber and Lyft are talking about, which hasn’t been well defined,” she said. “The CDC is recommending that anyone who is feeling sick stay home and not go to work, regardless of whether they’ve been diagnosed with coronavirus.”  

The ongoing debate over paid sick leave and other healthcare benefits—particularly among the growing ranks of so-called gig-economy workers—has received renewed attention in light of the coronavirus pandemic, revealing how holes in the United States healthcare system affect not only those without access to adequate healthcare and their families, but also the public at large.  

By classifying its drivers as independent contractors rather than employees, Uber is estimated to save millions if not billions of dollars annually in labor expenses while costing its workers a minimum wage, overtime pay, paid sick leave, and the ability to unionize, among other rights afforded to workers classified as employees.    

Uber has faced thousands of lawsuits and arbitration demands filed by drivers challenging their classification and has paid out tens of millions of dollars in settling such claims. Additionally, states and municipalities have increasingly cracked down, with California recently enacting a law aimed at forcing businesses to classify more workers as employees and New Jersey claiming that Uber’s alleged misclassification of its drivers has cost the state hundreds of millions of dollars in taxes and other payments, such as disability insurance.    

The ongoing coronavirus pandemic, the scope and total costs of which still remain to be seen, might place even more public pressure on gig-economy employers to provide their workers with basic rights that they are compelled by law to provide employees. After all, the pandemic has revealed in dramatic fashion how policies like providing paid sick leave and offering workers even basic healthcare directly impact not only those workers but public health more broadly.    

Sources:

Barron, E. (13 March 2020). Coronavirus: Lawsuits claim Uber and Lyft endangering public. The Mercury News  

O’Brien, S. (3 March 2020). Uber, Lyft warn drivers about coronavirus, but offer no paid sick days. CNN Business  

Cavaliere, V. (9 March 2020). Uber to offer drivers 14 days sick leave if they fall ill with coronavirus. CNN Business

Conger, K. (12 March 2019). Uber Settles Drivers’ Lawsuit for $20 Million. The New York Times  

Roosevelt, M. (14 February 2020). New California labor law AB 5 already changing how business treat workers. Los Angeles Times    

Pagones, S. (14 November 2020). Uber owes New Jersey $650M in overdue taxes: Report. Fox Business

Uber Lawsuit News: Former Uber Engineer Behind Alleged IP Theft Must Pay Google $179M

March 10, 2020
Author: Daniel Gala

A former engineer for Google and Uber must pay $179 million over allegations that he stole autonomous vehicle technology from Google’s Waymo unit and improperly transferred it to Uber, with a California state-court judge on March 4 approving a December ruling by an arbitration panel that had been tasked with resolving the case.     

The case centered on the conduct of Anthony Levandowski, who once worked as an engineer for Google in the company’s autonomous vehicle unit Waymo, which is in a feverish race with competitors to develop the self-driving technology that is expected to operate the vehicles of tomorrow.     

In 2016, Levandowski quit Google to create his own startup, Otto, which focused on developing self-driving trucks. Subsequently, Uber purchased Levandowski’s new company for $680 million. Google has alleged that Levandowski stole Google’s intellectual property in creating Otto, with this IP then being acquired by Uber when it purchased Levandowski’s company.     

Google’s autonomous driving unit Waymo then sued Uber over the alleged theft of intellectual property, with the companies ultimately settling the case in February 2018 for $245 million.     

Even after that settlement, however, Google/Waymo continued to pursue Levandowski personally, resulting in the $179 million arbitration panel decision, which now has been confirmed by a California Superior Court judge in San Francisco.     

Within hours of the judge’s ruling, Levandowski filed for bankruptcy protection.     

For its part, Waymo vowed to continue to do what it takes to defend its intellectual property.     

“Today the court has posted to the docket its final decision, confirming the award in Google’s favor and issuing a significant judgment against Levandowski,” said a Waymo spokesperson, per CNET. “We will continue to take the necessary steps to ensure our confidential information is protected.”     

One question remaining in the case is whether ride-share giant Uber potentially will be on the hook for Levandowski’s legal fees. When Uber purchased Levandowski’s company Otto, the contract contained an indemnification agreement under which Uber agreed to pay any legal fees Levandowski might incur defending himself from lawsuits.     

That issue is subject to ongoing legal action.     

“While Uber and Levandowski are parties to an indemnification agreement, whether Uber is ultimately responsible for such indemnification is subject to a dispute between the company and Levandowski,” Uber disclosed in its annual report, filed March 2 with the US Securities and Exchange Commission (SEC). “The ultimate resolution of the matter could result in a possible loss of up to $64 million or more (depending on interest incurred) in excess of the amount accrued.”     

In addition to Google’s accusations of intellectual property theft, Uber continues to face serious legal action on a number of other fronts. Thousands of Uber drivers have filed lawsuits or arbitration actions challenging their classification as independent contractors rather than employees, and a growing number of jurisdictions are making changes to their laws specifically to address so-called gig-economy employers. Also, the company faces numerous lawsuits over accusations that it has failed to take passenger safety seriously, with plaintiffs seeking to hold Uber accountable for the alleged criminal misdeeds of its drivers, from battery to sexual assault to even a killing.     

Sources:     

Dave, P. (4 March 2020). Ex-Uber self-driving head declares bankruptcy after $179 million loss to Google. Reuters     

Kerr, D. (5 March 2020). Ex-Uber engineer Levandowski ordered to pay Google $179 million. CNET     

Uber Technologies, Inc. (Filed 2 March 2020). Form 10-K for the 12 months ended Dec. 31, 2019. United States Securities and Exchange Commission (SEC). Commitments and Contingencies Disclosure [Abstract]. Note 15 – Commitments and Contingencies

Uber Lawsuit News: French Court Rules Uber Driver Is An Employee

March 10, 2020
Author: Daniel Gala

A French appellate court has ruled that a lawsuit filed by an Uber driver against the ride-share giant will be allowed to proceed on the basis that the driver qualifies as an employee rather than an independent contractor, TechCrunch reported March 4.     

The ruling by the French Court of Cassation is not subject to appeal. While the decision applies directly only to the instant case, many other Uber drivers are expected to rely on the case as precedent in bringing their own claims against the multi-billion-dollar one-time startup.     

The decision comes in a case originally filed with a French labor court in June 2017 by an Uber driver who had been removed from the company’s platform. Initially, that court refused to hear the case on the basis that it did not involve a relationship between an employee and an employer, but rather between a business and a self-employed partner.     

The Uber driver appealed this ruling, and an appellate court in Paris reversed the lower court’s decision, finding that there was, in fact, an employee-employer relationship between the driver and Uber. In its analysis, the court focused on the notion of subordination—that is, the extent to which Uber dictated the term’s of the driver’s work.     

Determining that Uber does control its drivers’ work arrangements to an extent sufficient for an employer-employee relationship to exist, the Parisian court noted that the Uber platform prevented a driver from building his or her own customer base (as passengers are unable to select their drivers); from setting his or her own prices; and even from seeing a passenger’s desired destination until accepting a ride.     

This decision ultimately was appealed to the Court of Cassation, France’s court of last resort from which no further appeals are possible, making its ruling that the Uber driver qualifies as an employee particularly significant.     

Agreeing with the conclusion of the first appellate court, the Court of Cassation also relied on the concept of subordination in its analysis.     

“When the driver goes online on Uber’s digital platform, there’s a relationship of subordination between the driver and the company,” the Court of Cassation wrote, per TechCrunch. “Based on that, the driver isn’t providing a service as a self-employed worker but as an employee.”     

The Court of Cassation used a three-prong test, looking to whether the Uber driver had control over pricing; customer relationships; and the manner in which he or she completed the work at hand. The court concluded that Uber’s argument in favor of driver self-employment failed on each element of this test.     

Around the world, Uber has argued that its drivers are not employees of the company but rather independent contractors, a distinction that saves the company millions if not billions of dollars each year in labor costs while costing its drivers protections such as a minimum wage, overtime pay, and the ability to unionize.     

Though legal standards vary from jurisdiction to jurisdiction and based on context, in looking to whether a particular worker qualifies as an employee or an independent, self-employed contractor, courts typically look to some combination of factors similar to those analyzed by the French appellate courts. Generally, these factors look to the level of autonomy a worker exercises in completing the tasks they are being paid to execute.     

Under Uber’s legal interpretation, its millions of drivers are, in fact, each running their own independent ride-for-hire business. However, critics of this view argue that Uber exercises a level of control over pricing and other practices that makes it much more like an employer than a business partner.     

Uber has faced thousands of lawsuits and arbitration demands filed by drivers challenging their status as independent contractors rather than employees. Meanwhile, states and municipalities have increasingly been pushing back against Uber and other gig-economy employers by passing laws and regulations making it more difficult for such workers to qualify as independent contractors.     

Most prominently, California’s AB 5, which went into effect January 1, 2020, codifies into state law the so-called ABC Test for employment status. This test, which has been adopted by a growing number of jurisdictions including Massachusetts, makes it more difficult for gig-economy employers to categorize workers as independent contractors, a distinction that also costs state and local governments potentially millions of dollars annually in payroll taxes, contributions to workers’ compensation funds, and other fees assessed on employees but not independent contractors.     

  Source:      

Dillet, R. (4 March 2020). Uber driver reclassified as employee in France. TechCrunch

Uber Lawsuit News: ‘I’ve Lost My Son’: Canadian Mom, Girlfriend Sue Uber For $7M Over Fatal Crash

March 10, 2020
Author: Daniel Gala

A grief-stricken mother and girlfriend have sued Uber Canada and other defendants over a fatal accident involving their loved one, saying the company and the City of Toronto have demonstrated “a wanton and outrageous disregard for the safety of the residents” of Toronto. They are seeking a combined $7 million in damages.     

The lawsuit, filed in late February with the Ontario Superior Court of Justice, was reported March 5 by Global News. The named defendants include Uber Canada, the City of Toronto, the Uber driver, and the driver of the vehicle that struck the Uber.       

“[T]he defendants engaged in conduct which was harsh, vindictive, reprehensible, and malicious,” the complaint alleges. As a result, “plaintiffs have suffered severe mental distress and claim aggravated damages for this conduct.”     

In March 2018, 28-year-old old Nicholas Cameron and his girlfriend Monika Traikov were passengers in an Uber vehicle taking them to Toronto Pearson International Airport. While on the Gardiner Expressway, the Uber driver’s phone fell from its mount. Pulling to a stop while still partially in a lane of traffic, the Uber driver retrieved his phone and began accelerating when the vehicle was struck by a third party.     

The collision sent the Uber vehicle, a 2012 Hyundai Sonata, careening across four lanes of traffic before striking the center median several hundred meters away. During the accident, Nicholas Cameron suffered fatal neck injuries and his girlfriend Traikov is alleged to have suffered traumatic brain injury.     

The Uber driver subsequently pleaded guilty to a charge of careless driving. He was fined $1,000, placed on two years of probation, and banned from driving for one year. He also has been required to perform 50 hours of community service, Global News reported in December 2018.     

For the Uber driver, the crash occurred during only his second day on the job.     

“The only thing a lawsuit can do…is name the people we feel are responsible and make them account for themselves in some way,” said plaintiff Cheryl Hawkes, mother of the deceased passenger, according to Global News. “I’ve lost my son, that’s not going to change. We’ve been shattered for a couple of years now.”     

In addition to filing the lawsuit, Hawkes has been pushing for other changes to the City of Toronto’s regulation of ride-for-hire drivers, including mandatory driver training.     

“Ride-share drivers should be treated like cab drivers, because that’s what they’re doing,” Hawkes said at the time of the Uber driver’s sentencing. “They’re taking money from the public to drive people to places safely, and why they’re accepted and why you have to play roulette with your life getting into one is absolutely wrong.”       

Uber has faced scores of lawsuits around the world seeking to hold the company accountable for the alleged misdeeds of its drivers, from reckless driving to sexual assault. Uber has come under increased fire for failing to adequately protect the safety of its passengers and the public at large by, among other things, conducting insufficient screening of new drivers.     

Uber also faces thousands of lawsuits and arbitration demands filed by drivers challenging their classification as independent contractors rather than employees.     

Source:      

Karamali, K. (5 March 2020). Mother, girlfriend of man killed in car crash file $7M lawsuit against Uber, City of Toronto. Global News      

McDonald, C. (4 December 2018). Former Uber driver sentenced for role in fatal Toronto crash. Global News

Uber Lawsuit News: Uber Uses Driver Classification To Argue Against Liability For Alleged Assaults On Passengers

March 4, 2020
Author: Daniel Gala

In making the legal argument that it should not be held responsible for the thousands of sexual assaults and other criminal acts allegedly perpetrated by its drivers, oftentimes against their own passengers, ride-sharing giant Uber has relied on its drivers’ classification as independent contractors rather than employees to say it is not responsible for their conduct, concluded an analysis by Bloomberg Law published March 2.

Bloomberg Law found that “Uber was sued 11 times in state court in 2019 and 10 in 2018, which doubled previous year totals. These cases include claims seeking to hold [Uber and ride-share competitor Lyft] liable for assaults because of negligent hiring and supervision and false promises of safety.” 

The analysis further found that since 2014 Uber had been sued 30 times in federal court based on similar claims. 

“But in defending dozens of civil lawsuits in court, the companies can claim they’re not responsible for criminal incidents ‘outside the scope of the employment relationship,’ in part because they consider their drivers independent contractors,” Bloomberg Law found. “That distinction is part of the complex balancing test used in cases involving employer liability for negligence and other claims.” 

Under mounting criticism for failing to protect passengers by adequately screening drivers before allowing them on its platform and for placing company interests ahead of rider safety in responding to complaints against existing drivers, Uber released in December 2019 its first ever safety report, revealing that thousands of sexual assaults had been reported on its platform during 2017 and 2018 alone. 

Meanwhile, thousands of Uber drivers have filed lawsuits or arbitration demands against the company, challenging their classification as independent contractors rather than employees, a distinction that costs workers rights such as a minimum wage, overtime pay, and the ability to unionize, while short-changing states and municipalities on payroll taxes, workers' compensation contributions, and other fees. 

As the data gather by Blooomberg Law reveals, these two seemingly disparate legal challenges facing Uber actually are intertwined in a significant way. 

“The increase in lawsuits [filed by victims of alleged assault] comes as San Francisco-based Uber and Lyft—both of which went public last year—and other gig-economy companies fight to keep their contractor-based business models, saying their labor costs would rise 20 to 40 percent if they’re forced to pay overtime and minimum wage under federal labor laws covering employees,” noted Bloomberg Law.

Now, based on the new analysis by Bloomberg Law, it is apparent that Uber also is using the worker classification of its drivers as a shield against liability and as a means of denying justice for victims of sexual assaults and other heinous acts allegedly perpetrated by its drivers. 

A lawyer representing alleged victims of ride-share drivers says that being legally insulated from liability disincentivizes Uber and other ride-share companies from being more proactive in protecting riders.

“Listen, if the drivers were employees, and they knew they would be on the hook for every single incident, then I’m sure they would practice very differently and prioritize safety,” lawyer Michael Bomberger, who has represented alleged victims of Uber drivers, told Bloomberg Law, referring to ride-share competitors Uber and Lyft. 

Independent Contractor Or Employee: Does It Matter For Employer Liability? 

While Uber certainly has argued that it should not be liable for the alleged criminal acts of its drivers because they are independent contractors not employees, it is a different question altogether whether this argument has succeeded in court. According to the Bloomberg Law analysis, the answer is not exactly clear, with state law varying on the issue and even different judges in the same court returning verdicts seemingly at odds with one another. 

For example, a DC federal court, ruling in a case involving a 2015 stabbing allegedly committed by an Uber driver, found the issue of employment classification irrelevant to the question of Uber’s liability, ruling that the negligence standard should be viewed as if the driver were an employee.

“Courts must now determine what is to be done about the risk of that old-fashioned danger in the market shaped by new players and new technologies,” wrote US District Judge James Boasberg, describing the various issues at play as representing some of the “growing pains of twenty-first century economics.” 

Similarly, a federal judge in the Northern District of California declined to rule on the issues of employment classification or scope of employment, instead allowing a lawsuit filed by two alleged assault victims to proceed on the basis that “assaults of this nature are exactly why customers would expect taxi companies to perform background checks of their drivers.”

That case ultimately settled in November 2016.

However, a different judge in the same Northern California federal court ruled in a later case against Uber that an alleged incident in which the perpetrator had merely posed as an Uber driver was not sufficiently connected to Uber's workplace activities, though the case was allowed to proceed and is scheduled for a hearing in March 2020.

Some attorneys argue that, even if Uber drivers were classified as employees, Uber still should not be held liable for illegal acts such as the sexual assaults, physical assaults, and even killings for which victims and their loved ones have sought justice and accountability. 

“If you hire someone to be your driver, and that person kills people, should you be responsible for that? Why should you be liable?” Myrna Maysonet, an attorney who represents employers, asked rhetorically, arguing that employer liability should vary based on the facts of each case. 

“If you hire someone who has a record of drinking-while-driving charges against him and he kills someone in an accident, you could be liable,” she offered by way of counterexample. 

Attorney Bill Levin, who represents female plaintiffs suing Uber and Lyft, agrees that worker classification should be irrelevant to the court’s analysis of liability, but, unsurprisingly, disagrees with Maysonet’s view of where the line should be drawn for employer responsibility to alleged victims.

“You have to conduct your affairs with reasonable care to avoid hurting other people,” Levin said, per Bloomberg Law. “If your business ends up being a platform where women get assaulted and you don’t do anything, you have to do something to minimize the risk. You can’t say it’s fine if they get sexually assaulted because they aren’t employees.” 

Sources: 

Mulvaney, E. (2 March 2020). Uber, Lyft Talk Responsibility on Assaults but Deny in Court. Bloomberg Law

Rosenblatt, J. (3 November 2016). Uber Settles Lawsuit Over Driver Sexual Assault Claims. Bloomberg

Uber Lawsuit News: Uber Must Face Jury Trial Over Billion-Dollar Claim That Ride-Share Idea Was Stolen

February 27, 2020
Author: Daniel Gala

Multi-billion-dollar ride-sharing giant Uber must face a jury trial in California over allegations that it stole foundational trade secrets from a nascent competitor, a separate jury decided in a verdict filed February 21. If found liable, the controversial tech startup could be on the hook for billions of dollars in damages. 

The verdict followed a multi-day trial over the narrow question of when plaintiffs Kevin Halpern and Celluride Wireless Inc. first should have been aware of their potential trade-secrets claim against Uber. The ride-sharing giant had attempted to have the case dismissed on the grounds that it was not filed within the legally permissible time period allotted for such claims. 

However, the jury rejected Uber’s assertion as to the date on which plaintiffs’ claims became (or should have become) apparent, undermining the company’s argument that the lawsuit had been filed too late.  

“Before March 15, 2012 did Plaintiffs discover, or with reasonable diligence should they have discovered, facts that would have caused a reasonable person to suspect that at least one Defendant had misappropriated Plaintiffs’ information?” the Special Verdict Form asked jurors. 

Below the question, jury foreperson Brad Stephens checked the line denoting an answer of “No”, authenticating the verdict with his signature and thereby paving the way for a trial on whether the founders of the embattled ride-share company illegally stole their multi-billion-dollar idea from someone else as part of a long-running scheme. 

The Named Defendants 

In addition to the corporate entity Uber Technologies Inc., other named defendants in the lawsuit include Uber co-founders Travis Kalanick and Garrett Camp; tech investor Scott Belsky; Bill Trenchard of Founder Collective and First Round Capital; as well as Founder Collective and First Round Capital themselves.  

As originally filed in 2015, the lawsuit accused the defendants of stealing Halpern’s intellectual property to form the basis of what ultimately would become Uber. 

“Plaintiff is informed and believes, and on the basis of said information and belief alleges, that Defendants and each of them, conspired to convert, and did convert, through deception, [plaintiff] HALPERN’s work and intellectual property to themselves so as to develop, create and monetize the goods and services now provided by, and to be provided in the future by, the companies UBER TECHNOLOGIES INC. and RAISER CA LLC,” the lawsuit alleges. 

Specifically, the lawsuit alleges that Uber co-founder and former CEO Kalanick falsely claims to be the inventor of the technology behind Uber’s ride-sharing platform. 

“KALANICK is a self-proclaimed original co-inventor/originator of the concept of using cellular technology to connect persons desiring transportation services with providers of such transportation using a computer enabled smartphone application,” the lawsuit says, adding, “He is not. He obtained the concept unlawfully from HALPERN and CELLURIDE.” 

The complaint levels the same accusations at the defendant Camp, using identical language. 

As for Trenchard and Belsky, two prominent players in the upper echelons of the tech world, the lawsuit accuses them of investigating in a young Uber despite having knowledge that the company was stealing the trade secrets at the core of its business plan. 

“PLAINTIFF is informed and believes on the basis of said information and belief alleges that TRENCHARD originally invested his own money, and subsequently invested funds of Defendant FOUNDER COLLECTIVE into the UBER enterprise knowing that unlawfully misappropriated trade secrets were being used by the other Defendants in the enterprise,” the complaint says.

Similarly, the plaintiffs Halpern and Celluride claim that “BELSKY originally invested his own money into the UBER enterprise knowing that unlawfully misappropriated trade secrets were being used by the other Defendants in the enterprise.” 

The Plaintiffs’ Claims 

The lawsuit chronicles in great detail how, throughout the early 2000s, Halpern allegedly worked fervently to form a new kind of transportation company based around recently implemented location-based technology available via users’ cellular phones. This work culminated with his founding Celluride in 2005. 

Subsequently, Halpern alleges that he shared his idea—which he was keeping as a closely-held secret from all but those with direct involvement in the project—with Kalanick, who Halpern had intended to serve as an advisor to Celluride. 

“Following KALANICK’s assurances of confidentiality, HALPERN shared the Celluride concept, described its architecture, and showed KALANICK the interface sketches and designs as well as a working cell phone demo,” the 2015 lawsuit claims.

The suit further alleges that Halpern was enticed to share secret company information with other defendants, including Trenchard. Halpern was led to believe that he was sharing this information with Trenchard on a confidential basis and with regards to Trenchard’s perceived role as an advisor to and potential investor in the company. 

However, the lawsuit says the defendants possessed ulterior motives. 

“At all times material to this complaint, HALPERN and CELLURIDE believed that TRENCHARD, KALANICK,…[and] BELSKY…were acting in a confidential capacity with HALPERN and CELLURIDE for the purposes of developing Celluride so as to timely bring it to market,” the complaint states. “[Defendants] instead, unlawfully…defrauded HALPERN and CELLURIDE, misappropriated PLAINTIFFS’ trade secrets and deprived, and converted PLAINTIFFS’ property to their detriment.” 

On the basis of these facts, the original complaint alleged four causes of action: misappropriation of trade secrets; conversion; breach of contract; and declaratory relief. Among the causes of action, plaintiff seeks compensatory damages, special damages, exemplary damages, and punitive damages. The lawsuit also seeks a “judicial determination regarding these claimed respective rights and interests in the technology and application and the profits therefrom.” 

Conclusion

That a potentially multi-billion-dollar lawsuit alleging that Uber stole the very intellectual property at the core of its business model now will proceed to trial before a jury is representative of the numerous ways in which the company’s notoriously brash business practices are coming back to catch up with it. In addition to the instant case, the company also faces thousands of lawsuits and arbitration demands filed by its own drivers, who are challenging their classification as independent contractors rather than employees, an issue that the company itself has admitted could pose an existential threat to its business model. 

Further, Uber continues to face increased pushback from municipalities that have bristled at the company’s routine flaunting of local rules that apply to other ride-for-hire drivers, vehicles, and businesses, interfering with business plans reliant on breakneck rates of growth to keep the never-profitable company afloat. 

Sources: 

Superior Court of the State of California County of San Francisco. (21 February 2020). Special Verdict Form. Case No. CGC-15-545825. Kevin Halpern & Celluride Wireless Inc. v. Uber Technologies Inc., et al

Superior Court of the State of California County of San Francisco. (14 May 2015). Plaintiff’s Verified Complaint and Demand for Jury Trial. Case No. CGC-15-545825. Kevin Halpern & Celluride Wireless Inc. v. Uber Technologies Inc., et al

Uber Lawsuit News: Uber’s South Carolina Insurance Co. Sues Over Alleged Hit-And-Run Scheme Involving Uber Drivers And Vehicles

February 27, 2020
Author: Daniel Gala

A South Carolina-based insurance company has filed a federal lawsuit accusing 52 individuals of participating in an insurance fraud scheme allegedly involving multiple Uber drivers and their vehicles, The State reported February 20. 

According to the civil complaint, the alleged perpetrators illegally attempted to bilk James River Insurance out of some $75,000 via 21 reported vehicle collisions the company says were either staged or never took place. James River Insurance, which cover Uber vehicles operating in the Columbia, South Carolina region, says the alleged incidents took place from June 2017 through January 2019. 

The lawsuit claims that, following the supposed vehicular accidents, passengers would seek medical treatment for their alleged injuries, aiming to stick James River with the bill. The lawsuit further alleges that many of the suspected confederates knew one another socially, saying such connections make fraud more likely. 

“Such personal relationships decrease the likelihood that the defendants were all actually involved in real hit-and-run accidents while using an Uber ride share and increase the likelihood that these alleged ‘accidents’ are actually staged motor vehicle accidents for the purpose of committing insurance fraud,” the lawsuit says, according to The State.

A spokesman for the Federal Bureau of Investigation’s (FBI’s) Columbia, SC field office said that it is aware of the lawsuit but declined to comment on whether a corresponding criminal investigation is taking place, according to The State. To date, no criminal charges have been filed in the matter. 

In one particular incident described in the insurance company's lawsuit, it is alleged that an Uber driver was working in coordination with two passengers in her own vehicle as well as the driver and passengers in a separate vehicle when the second car intentionally ran a stop sign and struck the Uber vehicle, resulting in nearly $9,000 in damage. 

In another incident the insurance-company plaintiff identifies as suspicious, an Uber driver claimed to have been involved in a hit-and-run accident with another moving vehicle, seeking reimbursement for $3,000 in damage. 

However, the lawsuit alleges that inspectors found that the vehicle’s damage was “consistent with an impact with a fixed object and inconsistent with an impact with a moving vehicle,” per The State.

Though the lawsuit was filed in August 2019, it was first reported by The State on February 20. With at least two of the accused individuals working as Uber drivers, the case represents yet another example of Uber drivers allegedly engaging in criminal activity that poses a potential safety risk both to passengers and the public at large. 

Multi-billion-dollar ride-share giant Uber has faced mounting scrutiny over allegations that it has failed to protect passenger safety by adequately screening drivers prior to allowing them on its platform and by responding in a meaningful way to passenger complaints about the behavior of existing drivers. The company faces a number of lawsuits brought on behalf of passengers who allegedly suffered personal harm due to the alleged criminal acts of their Uber drivers, including sexual assault, rape, and even homicide. 

Uber could not be reached for comment on the lawsuit, according to the The Associated Press.

Sources: 

Marchant, B. (20 February 2020). 52 people staged Uber hit-and-runs in Columbia to get insurance money, lawsuit says. The State

The Associated Press. (20 February 2020). Lawsuit: 52 people faked Uber accidents for insurance money

Uber Lawsuit News: Mom Sues Uber, Driver After Missing Underage Son Found To Have Taken Unauthorized 300-Mile Uber Ride

February 24, 2020
Author: Daniel Gala

A mother in Mount Pleasant, Georgia has sued ride-sharing giant Uber and one of its drivers for negligence after her underage son allegedly took a 300-mile Uber ride from his school to the Atlanta Braves baseball stadium, the Post and Courier reported February 21.

According to Uber policy, it is forbidden for a minor to ride in an Uber without an adult present. However, the lawsuit filed by mother Gina Wintz alleges that, on March 12, 2019, her 16-year-old son was able to hail an Uber ride from his school, Oceanside Academy, to the professional baseball stadium hundreds of miles away. The suit says that the 16-year-old hailed the ride so that he could run the bases at the stadium. 

Wintz’s complaint seeks unspecified damages for emotional distress. Police and volunteers searched for hours after she reported her son missing, with the search being called off at 7:15 pm. Her son has been charged in juvenile court, though information pertaining to that case is sealed due to his minor status. 

The mother's lawsuit is just the latest to be filed against Uber by a plaintiff alleging that the company has failed to adequately protect the safety of its customers. In the instant case, Uber potentially placed a minor child in serious danger when its driver took him 300 miles away from home in violation of its own policy, and public safety resources were diverted unnecessarily as police and volunteers spent hours searching for the missing youth. 

The lawsuit is hardly the first to be filed against the controversial multi-billion-dollar ride-sharing company alleging passenger safety was put at risk by the improper, and even criminal, acts of an Uber driver. 

Tragically, plaintiffs in a number of other lawsuits allege actual physical harm at the hands of their Uber drivers, including claims of sexual assault, rape, and even homicide. Uber has faced growing scrutiny over allegations that it has failed to adequately protect the safety of its passengers, for example by not screening drivers thoroughly enough and not taking passenger complaints against drivers seriously. 

Uber also faces thousands of lawsuits and arbitration demands filed by drivers challenging their classification as independent contractors rather than employees, a distinction that means they lack rights afforded to workers classified as employees, such as a minimum wage, overtime pay, and the ability to unionize. Meanwhile, classifying workers as independent contractors is estimated to save companies like Uber 30-40% on employment costs. 

Source: 

Coello, S. (21 February 2020). Mount Pleasant mom sues Uber after underage son rides to Atlanta Braves Stadium. The Post and Courier

Uber Lawsuit News: San Francisco Seeks Dismissal Of Lawsuit Saying It Let Uber Make Taxi Medallions Worthless

February 19, 2020
Author: Daniel Gala

On a Friday, February 21, a California state court judge is scheduled to hear oral arguments over the city of San Francisco’s attempts to dismiss a lawsuit alleging that the municipality effectively rendered hundreds of taxi medallions worthless by turning a blind eye while ride-share operators such as Uber, unencumbered by many of the regulations that still apply to traditional cab operators, encroached on territory once reserved exclusively for licensed ride-for-hire vehicles and drivers. 

Plaintiffs say the practice has driven the market for San Francisco taxi medallions from a value of roughly $155 million to effectively zero. Although the city argues that the market for taxi medallions still is operational, no San Francisco medallions have been sold since April 2016, per the San Francisco Chronicle.

The plaintiff in the case is not a medallion holder itself but a credit union that made loans to finance the purchase of San Francisco taxi medallions, which the city still values at $250,000 apiece but experts say now are worth a fraction of that. The plaintiff San Francisco Federal Credit Union wants the city to reimburse its losses on more than 600 such loans. 

The Chronicle reports that 172 drivers have had the loans on their taxi medallions foreclosed upon. 

For its part, the city argues that the medallion market is still up and running and that the agency in charge, the San Francisco Municipal Transportation Agency (SFMTA), has been actively trying stimulate interest.

“SFMTA has continued its efforts to revive demand for both taxis and medallions,” the city argued in its motion to dismiss the credit union’s lawsuit, as quoted by the Chronicle. 

However, the plaintiff credit union argues that this is merely a charade meant to absolve the city from responsibility. 

“They just don’t want to say they’ve ended the program because if they do, they have to write a very large check to medallion holders and to the credit union,” said attorney Dan Bailey, representing San Francisco Federal Credit Union. 

Under San Francisco law, if the SFMTA terminates the medallion program, it is required to reimburse medallion holders at the original purchase price, or $250,000. 

The credit union argues that the city coaxed it and other lenders to make loans backed by the medallions by explicitly promising that the city would cover any potential shortfalls due to a drop in medallion prices. As evidence, they point to past communications from city leaders themselves. 

“As we discussed, if the market price of the Medallions falls precipitously, i.e., no one is willing to buy for the price paid previously in a deal that a Qualified Lender loaned on, SFMTA will end up making up the gap,” San Francisco deputy city attorney Mariam Morley wrote in a March 2010 email. 

The city has argued that this email is inadmissible as evidence in the case, arguing in a brief that the plaintiff’s case “is based entirely on irrelevant and inadmissible evidence.”

The sudden drop in the value of taxi medallions due to the sudden influx of ride-sharing services like Uber, with their deep pockets and bull-in-a-china-shop approach to entering new markets, is not exclusive to Uber’s home city of San Francisco but has been a common experience across the United States and around the world. For example, in New York City, the value of a taxi medallion has dropped two-thirds from 2010 to 2019; in Chicago, the price fell by 82% over that same span; in Philadelphia, the figure was 93%; and, in Miami, it was 92%.

These numbers represent a momentous loss of wealth not only for the holders of the medallions themselves but for the creditors who lent money based on the medallions’ perceived value. Now, these stakeholders have been left holding the bag while so-called “disruptors” such as Uber’s highly controversial co-founder and former-CEO Travis Kalanick have cashed out to the tune of billions. 

Now, pending the outcome of lawsuits such as this one, taxpayers in municipalities like San Francisco may potentially be on the hook for tens if not hundreds of millions of dollars in lost medallion value due to local officials’ refusal to place stricter controls on companies like Uber as their drivers first flooded regional roadways. 

Source: 

Said, C. (16 February 2020). Multimillion-dollar SF taxi medallion case seeks resolution. (16 February 2020). San Francisco Chronicle

Uber News: ‘I Have Never Been That Scared In My Life’: Uber Driver Charged With Abduction After High-Speed Chase

February 18, 2020
Author: Daniel Gala

An Uber driver in Richmond, Virginia has been charged with multiple felonies, including two counts of abduction, after he led passengers on a high-speed chase in an effort to catch another vehicle as it fled the scene of an accident.   

The incident—which represents yet another example of an Uber driver putting passengers in danger by allegedly engaging in criminal behavior—has gained additional prominence because the passengers, husband and wife John Murray and Tameka Swann, live-streamed the incident on Facebook as the high-speed chase was in progress.    

“He kept going, that was the scariest moment of my life,” Swann later told local CNN affiliate WTVR. “I have never been that scared in my life.”    

The live-streamed incident took place on Monday, February 10, when Swann and Murray hailed an Uber ride to take them from their home to a local restaurant for dinner. Minutes after entering the ride-share vehicle, it was rear-ended by another car. Rather than stopping, the driver of the second car attempted to flee the scene. That’s when the high-speed chase ensued.   

“I thought we were just going to pull over and they would exchange information but the other driver pulled around us and took off,” Murray said. “I had no idea he was about to go fast and furious on us.”    

Swann began live-streaming the incident after the other vehicle rear-ended their Uber ride but before the high-speed chase had begun. Initially, the video shows the Uber driver attempting to contact 911 on his own phone to report the accident. But, when the other driver flees the scene, the Uber driver gives chase, ignoring the passengers pleas to stop.    

“I got four kids. I can’t be riding like this,” Swann says in the video. “You’ve got to let us out.”   

“I can’t let this guy go,” the Uber driver can be heard responding.   

The Uber driver even continued the high-speed pursuit after his passengers had succeeded in reaching 911. The emergency operator instructed to Uber driver to stop his vehicle, but he did not comply.    

The high-speed pursuit lasted several minutes in total, and it included a number of close calls, including a moment where the Uber driver appears to narrowly miss a bicyclist while speeding through a red light.    

The Uber driver has been charged with reckless driving and felony hit and run, in addition to the two counts of abduction.    

“This driver’s behavior is deeply concerning and his access to the app has been removed,” Uber said in a statement quoted by CNN. “We have been in contact with the rider and stand ready to support law enforcement on their investigation.”    

Despite Uber’s supposed concern, Swann says her confidence in the service has been shaken permanently.    

“I send my kids in Uber sometimes, but never again,” Swann said.   

“I thank God we are still here,” Murray added.   

Embattled multi-billionaire-dollar ride-sharing giant Uber has been under increasing fire recently for, among other controversial practices, allegedly failing to adequately protect passengers from potentially dangerous drivers. Critics say that this is a tragic byproduct of Uber’s never-ending appetite for breakneck expansion, which they argue has resulted in the company’s failure both to thoroughly screen new drivers and to respond adequately to passenger complaints about existing ones.    

Some alleged victims have taken their cases to the courtroom, with a number of plaintiffs having sued Uber over the alleged criminal acts of its drivers, including claims of sexual assault and rape.    

Sources:    

WTVR/CNN. (13 February 2020). Uber driver charged with kidnapping after couple livestreams high-speed chase on Facebook   

CNN. (13 February 2020). Virginia: Uber driver charged with kidnapping after passengers live stream chase

Uber News: Judge Rejects Uber’s Request To Put Calif. AB 5 On Hold

February 14, 2020
Author: Daniel Gala

In a ruling filed Monday, February 10, a Los Angeles-based federal judge denied a request by gig-economy employers Uber and Postmates to temporarily place a hold on California's new workers'-rights law known as AB 5. Though acknowledging the companies’ concerns that the law could pose an existential threat to their business models, in denying their motion for a preliminary injunction, the presiding judge cited AB 5’s public benefits as superseding the businesses’ private concerns.    

Described by many observers as essentially codifying into state law the California Supreme Court’s landmark 2018 Dynamex ruling, AB 5 passed the state legislature and was signed into law by Governor Gavin Newsom in 2019. As with the Dynamex decision, AB 5 establishes a new test for determining whether a worker qualifies as an independent contractor or an employee under state law, with the revised standard making it more difficult for gig-economy employers such as the ride-sharing giant Uber to continue to classify its thousands of drivers in California as independent contractors.    

By some estimates, classifying their fleets of app-based workers as independent contractors rather than employees saves companies like Uber and Postmates 30-40% on their employment costs, amounting to millions if not billions of dollars annually. It also means those workers lack certain protections afforded employees, including a guaranteed minimum wage, overtime pay, and the ability to unionize, while forcing them to absorb additional costs, such as car-related expenses and self-employment taxes.     

Uber and Postmates had requested a preliminary injunction in the hopes that US District Judge Dolly Gee would put AB 5 on hold pending litigation. Judge Gee’s denial of their request will affect not only the plaintiffs in this case but scores of gig-economy employers across the state that houses Silicon Valley itself, where many aspects of the gig-economy first were conceived and implemented.    

That Uber has faced such fierce legal and political headwinds in its home state shows just how widespread the opposition to its business practices has become.    

The request for preliminary injunction comes during a lawsuit originally filed by Uber and Postmates on December 30, 2019, seeking to forestall enforcement of AB 5, which was set to take effect January 1, 2020. The lawsuit alleged that the new employment law violated both the state and federal constitutions, including the equal protection and due process clauses of both documents. Uber and Postmates claim AB 5 violates equal protection by unreasonably treating app-based workers differently than other workers, and that the law denies due process by denying Uber drivers the ability to engage in the profession of their choice.    

Despite Uber’s claims that its drivers prefer the supposed freedom and flexibility that comes with their classification as independent contractors, across the United States and around the world, thousands of Uber drivers have joined lawsuits or filed arbitration demands challenging their employment classification and arguing that they should be re-classified as employees.    

Gig-economy workers are not the only alleged victims of the companies’ claimed misclassifications, with government entities potentially missing out on millions of dollars in tax revenue as a result of the companies’ employment strategies. For example, in November 2019, New Jersey’s labor department informed Uber and its local affiliate that the companies owed roughly $650 million in unemployment and disability insurance, including $523 million in unpaid taxes and nearly $120 million in penalties and interest, Bloomberg Law reported at the time.   

Other industries also have brought challenges to California’s AB 5. Whereas Uber and Postmates have had their request for a preliminary injunction denied, the California Truck Association (CTA) succeeded in having the onset of AB 5 paused as it relates to “any motor carrier operating in California,” per JDSupra. The CTA has argued that, as it relates to trucking, AB 5 is preempted by federal laws governing interstate commerce.    

Professional organizations representing freelance writers and photographers also have filed suit challenging AB 5’s provisions pertaining to freelance journalists and video journalists. The plaintiffs request for a preliminary injunction in that case will be heard March 9.    

Sources:   

Bellon. T. (10 February 2020). Judge denies Uber’s, Postmates’ request to halt California gig worker law. Reuters   

Frommer, D. et al. (12 February 2020). Court Denies Preliminary Injunction in Uber Lawsuit Arguing that California’s AB 5 is Unconstitutional; Other Challenges Continue. JDSupra   

Opfer, C. (14 November 2019). Uber Hit With $650 Million Employment Tax Bill in New Jersey. Bloomberg Law

Uber Lawsuit News: Uber Sued Over Driver’s Alleged Atlanta Sexual Assault; Police Accused Of Not Taking Complaint Seriously

February 10, 2020
Author: Daniel Gala

In yet another incident casting doubt on promises made by ride-sharing giant Uber to take a more proactive approach to passenger safety, particularly when it comes to sexual assaults allegedly committed by the company’s drivers against its passengers, an Atlanta woman has sued the embattled one-time tech darling, saying that she was sexually assaulted by her female driver and that both the company and police failed to take her complaints seriously.   

“[C]ontrary to multiple and repeated statements made by Uber in its recently published 2017-2018 US Safety Report, Uber essentially ignored Doe’s allegations of sexual assault,” alleges the federal lawsuit, filed Friday, February 7 in San Francisco, per Law.com.   

In December, Uber voluntarily published its first-ever public safety report, detailing thousands of complaints of sexual assault the company has received from passengers in recent years and promising to take measures to improve safety for both passengers and drivers.   

The plaintiff in the instant case alleges that she was severely intoxicated when she hailed an Uber ride home in August 2019, after which her female Uber driver followed her into her home, where she forced the passenger to perform oral sex on her.   

In a troubling development that has occurred in at least one other incident involving an Uber driver, the plaintiff Jane Doe claims that the alleged perpetrator attempted to preemptively turn the tables on her victim by filing a complaint with Uber saying that the driver was, in fact, the one who was assaulted.   

Two days after the incident, still not being in an emotional state to have filed her own report, the plaintiff claims she received correspondence from Uber saying that her driver had, in fact, claimed to have been assaulted by her passenger.   

This preemptive reporting by the alleged perpetrator of a sexual assault mirrors a situation that took place recently on California’s central coast, in which a woman claims she was sexually assaulted by her Uber driver only to have him call police and have her arrested for allegedly assaulting him. The recurrence of such similar incidents suggests that preemptively reporting passengers may be becoming a strategy employed by predatory Uber drivers in an attempt to evade responsibility for their alleged misdeeds.   

Equally if not more troubling, the plaintiff Jane Doe says police also failed to take her claims seriously, mocking the notion of a female-on-female sexual assault.   

“Body camera footage recently obtained by counsel for Doe reveals that the responding officers not only did not treat Doe’s allegations with the dignity which they deserve, but apparently found it amusing that a female had sexually assaulted another female,” the complaint says. “Indeed, when the lead responding officer learned the particulars of Doe’s allegations, he smirked, in fact almost chuckled, and then proceeded to interrogate Doe as if she had done something wrong.”   

Jane Doe has sued Uber in San Francisco federal court for fraud, failure to warn, intentional inflection of emotional distress, trespassing, false imprisonment, assault, sexual battery, and battery.   

Sources:   

Lancaster, A. (7 February 2020). Rider Claims Uber Didn’t Take Her Claims of Assault by Female Driver Seriously. The Recorder. Law.com   

Uber Technologies Inc. (December 2019). 2017-2018 US Safety Report   

Holden, Lindsey. (29 January 2020). Paso Robles woman says Uber driver sexually assaulted her. But she was the one arrested. The San Luis Obispo Tribune

Uber Lawsuit News: Uber’s Vancouver Rollout Snarled In Litigation, Regulatory Action

February 5, 2020
Author: Daniel Gala

Embattled ride-sharing giant Uber has hit yet another bottleneck in its plans to expand its service into new markets, this time hitting regulatory and legal roadblocks in the Vancouver, British Columbia region of western Canada.    

As in other regions, Uber has faced local opposition from taxi companies and municipalities, who have bristled at the company’s expand-at-all-costs approach to maintaining sky-rocketing growth rates, often at the cost of local ride-for-hire businesses and drivers.    

The situation in the Vancouver region also has, at times, pit local officials against regional leaders, whose desired approaches to regulating ride-share services have sometimes clashed.    

For example, while the provincial Passenger Transportation Board has approved operating licenses for ride-sharing competitors Uber and Lyft, some municipalities within the province have continued to ban the companies from operating within their borders.    

The city of Surrey, for instance, has been issuing traffic tickets to Uber drivers operating there. While Uber is seeking a court order forcing the city to stop the practice, Surrey Mayor Doug McCallum has promised additional fines, British Columbia’s The Globe and Mail reported January 29.    

Meanwhile, provincial authorities insist that local municipalities may not legally block ride-sharing companies from operating, though they continue to do so.    

For its part, Uber argues that it is caught in an untenable situation in which the city of Surrey is requiring it to possess an operating license that the city will not issue.    

“The City of Surrey does not have a business license for ride sharing…and then the city says, ‘You’re operating without a business license,” complained Uber’s chief for western Canada Michael van Hemmen, per The Globe and Mail.    

Like Surrey’s Mayor McCallum, officials in the city of Burnaby also have insisted that ride-sharing companies must obtain taxi licenses in order to operate there.    

“If they’re consistently picking up in Burnaby, I wouldn’t have any problem with giving those tickets,” said Sav Dhaliwal, a left-leaning councilmember who also acts as chair of Metro Vancouver, a regional authority. “Free enterprise only works best when everybody has the same rules.”    

Opposition to the ride-sharing services has united individuals from different sides of the political spectrum, with the left-leaning Dhaliwal echoing similar concerns and potential solutions as Surrey’s conservative Mayor McCallum.    

Vancouver proper has taken a more welcoming approach, rolling out a special regulatory scheme that treats ride-sharing platforms differently from taxi companies. The city of Richmond has allowed the companies to apply for and obtain licenses under the city’s preexisting ride-for-hire structure, which covers everything from taxis to tow trucks.    

In addition to regulatory action imposed by local and regional authorities, Uber also is facing a number of Vancouver-based lawsuits filed by taxi companies operating there. These companies accuse Uber of acting in violation of existing rules governing ride-for-hire services.    

The opposition confronting Uber in the Vancouver region mirrors litigation and regulatory action the company has faced around the world, as local residents, workers, businesses, and elected officials increasingly push back on what critics say are Uber’s anticompetitive and sometimes illegal business practices.    

Additionally, Uber faces thousands of lawsuits and arbitration demands filed by its own drivers, who are challenging their classification as independent contractors rather than employees. This distinction costs Uber drivers protections afforded to workers categorized as employees, including the right to a minimum wage, overtime pay, and the ability to unionize.    

Uber also has faced growing scrutiny for the thousands of reported incidents of sexual assault and other improper behavior allegedly committed by Uber drivers against their passengers. The company has faced criticism for failing to adequately screen drivers before allowing them to operate on their platform and for putting company interests first when “investigating” reported incidents.      

  Source:   

Bula, Francis. (29 January 2020). Ride-sharing in Vancouver region off to a bumpy start with lawsuits, political turmoil. The Globe and Mail

Uber Lawsuit News: Calif. Woman Sues Uber Over Alleged Sexual Assault, Says Driver Had Her Arrested In Response

February 4, 2020
Author: Daniel Gala

A woman from California’s central coast has sued ride-sharing giant Uber, alleging that one of the embattled company’s drivers sexually assaulted her before subsequently having her arrested on false claims that he was the victim rather than the perpetrator.  

On January 22, plaintiff Jill Marsh filed a civil lawsuit in San Luis Obispo County Superior Court naming as defendants Uber and its driver Abdelhadi Lebbar. The complaint alleges that the incident occurred on September 14, when Marsh hailed a ride through the Uber platform, and Lebbar picked her up, The San Luis Obispo Tribune.  

  Marsh claims that the ride took an insidious turn when her driver failed to make the appropriate turn for her requested destination and instead continued to drive into a more remote area.   

After pulling over and attempting to enter the rear of the vehicle beside the plaintiff, the lawsuit claims that the Uber drive Lebbar “placed his hand on [the plaintiff’s] body, breasts, and abdomen without her consent, resulting in bruising to her skin in these areas.”   

During the incident, Marsh says she attempted to call for help via 911 but was unable to connect with emergency responders. Following the altercation, the plaintiff claims that Lebbar returned to the driver’s seat and again began driving the vehicle, at which time he telephoned police alleging he had been the victim of an attack by his passenger.   

The move was done in a “panic over the consequences of what he had done,” the lawsuit alleges.   

Police then met the pair at a local gas station, where the plaintiff Marsh was arrested for misdemeanor assault and battery, as well as public intoxication. Lebbar told police that Marsh had removed his glasses from his face while he was driving his vehicle and had thrown a cup at the back of his head. As evidence, he showed a red mark on the back of his head and that his glasses were broken.   

“Ms. Marsh was extremely intoxicated and admitted to striking Lebbar,” the police report of the incident says, as quoted by The Tribune. “He requested prosecution for the battery against him. Ms. Marsh made mention of some type of assault against her…however, she never explained what that assault was, despite repeated requests by the investigating officer. She was extremely intoxicated.”   

Police subsequently made a recommendation to the San Luis Obispo County District Attorney’s Office that it bring criminal charges against the passenger Marsh. The DA’s office has yet to make a determination as to whether such charges will in fact be brought.   

While the police report notes that “it seems appropriate that we reach out to Ms. Marsh to gain a clarifying statement that we can add to our report,” it adds that “[t]o [the officer’s] knowledge she never reached out to [police] after her arrest.”   

Reached for comment by The San Luis Obispo Tribune, the attorney representing Marsh said, “The complaint filed in San Luis Obispo Superior Court speaks for itself. We have no further comment at this time, other than looking forward to presenting this case to a local jury.”   

The alleged sexual assault on Marsh by her Uber driver is just one of thousands of such incidents reported in recent years. While Marsh’s situation is somewhat unique in that she claims her driver turned the situation around by having her arrested for alleged assault, dozens of plaintiffs have sued Uber claiming the company has failed to adequately protect passengers from predatory drivers and arguing that the company should be held accountable for the harm caused.   

  Source:    

Holden, Lindsey. (29 January 2020). Paso Robles woman says Uber driver sexually assaulted her. But she was the one arrested. The San Luis Obispo Tribune

Uber Lawsuit News: US Justice Department Closes Probe Into Alleged Uber Bribery Scandal In India

January 22, 2020
Author: Daniel Gala

The United States Department of Justice (DOJ) has decided to close a multiyear investigation into ride-sharing giant Uber’s alleged payment of bribes to police and hospital workers in India, a decision that has upset law-enforcement counterparts in that country, the Indian newswire service IANS reported January 21.  

The alleged bribes were claimed to have been paid to police and hospital workers in New Delhi in connection with the case of an Uber driver accused of rape following a 2014 incident. That driver later was convicted of the crime in court and sentenced to life in prison.   

Rumors soon began to circulate that Uber had bribed individuals in order to obtain the alleged victim’s confidential medical records. The DOJ launched its probe in 2017 after it was revealed that former Uber CEO Travis Kalanick had made “irregular payments” in order to obtain the records.   

It is illegal under US law for US companies or persons to pay bribes abroad.   

Uber disclosed being subject to multiple DOJ bribery probes in the prospectus it filed in the lead up to its highly disappointing May 2019 initial public offering (IPO).   

“We received requests from the Department of Justice in May 2017 and August 2017 with respect to an investigation into allegations of small payments to police in Indonesia and other potential improper payments in other countries in which we operate or have operated, including Malaysia, China, and India,” the prospectus said, as quoted by IANS.   

In 2017, the Indian rape victim sued Uber in United States federal court, accusing one of the company’s US executives of meeting “with Delhi police and intentionally obtaining” the victim’s “confidential medical records.”   

“Uber executives duplicitously and publicly decried the rape, expressing sympathy for plaintiff, and shock and regret at the violent attack, while privately speculating, as outlandish that it is, that she had colluded with a rival company to harm Uber’s business,” the rape victim’s US lawsuit against Uber said, per IANS.   

That case was settled in December 2017.   

Not only will the DOJ decision to close the investigation hamper efforts to hold accountable any US persons who might have violated federal anti-bribery laws, but it also is likely to hinder efforts in India to identify and reprimand any police officers and/or hospital workers who may have illegally exchanged confidential information for monetary payments.   

“With the US Department of Justice closing the probe against the Uber [sic] in their bribery case and in Delhi, the Office of Commissioner of Police is turning a blind eye to the matter, it will now be nearly impossible to trace and probe the errant cops who took bribes in the case,” Sumit Kumar Singh wrote for IANS.   

The closing of the DOJ probe has received little media attention in the United States. Despite resigning as CEO in 2017, Kalanick, a company co-founder, remained on Uber’s board of directors until December 31, 2019, at which time he resigned his position and sold the vast majority of his remaining Uber shares, estimated to be worth approximately $2.5 billion.  

Despite the probe’s ending, Uber continues to face potentially existential legal challenges on numerous fronts. Thousands of the company’s own drivers have filed lawsuits and arbitration actions challenging Uber’s classification of them as independent contractors rather than employees, and states like California have begun to pass laws making it more difficult for gig-economy employers to continue to treat workers as independent contractors.     

Additionally, scores of alleged sexual assault victims have sued Uber attempting to hold the company responsible for the criminal acts of its drivers. These lawsuits accuse Uber of having emphasized profit and explosive growth over passenger safety through a lax driver screening process and a compromised complaint-reporting system, which reportedly puts pressure on company investigators to place Uber’s interests ahead of those of the alleged victims.   

Source:  

Singh, Sumit Kumar. (21 January 2020). Rape case: US Justice Dept shuts probe on Uber bribery charges. MENAFN. IANS

Uber Lawsuit News: US Justice Department Closes Probe Into Alleged Uber Bribery Scandal In India

January 22, 2020
Author: Daniel Gala

The United States Department of Justice (DOJ) has decided to close a multiyear investigation into ride-sharing giant Uber’s alleged payment of bribes to police and hospital workers in India, a decision that has upset law-enforcement counterparts in that country, the Indian newswire service  IANS reported January 21.

The alleged bribes were claimed to have been paid to police and hospital workers in New Delhi in connection with the case of an Uber driver accused of rape following a 2014 incident. That driver later was convicted of the crime in court and sentenced to life in prison.  

Rumors soon began to circulate that Uber had bribed individuals in order to obtain the alleged victim’s confidential medical records. The DOJ launched its probe in 2017 after it was revealed that former Uber CEO Travis Kalanick had made “irregular payments” in order to obtain the records.  

It is illegal under US law for US companies or persons to pay bribes abroad.  

Uber disclosed being subject to multiple DOJ bribery probes in the prospectus it filed in the lead up to its highly disappointing May 2019 initial public offering (IPO).  

“We received requests from the Department of Justice in May 2017 and August 2017 with respect to an investigation into allegations of small payments to police in Indonesia and other potential improper payments in other countries in which we operate or have operated, including Malaysia, China, and India,” the prospectus said, as quoted by IANS.  

In 2017, the Indian rape victim sued Uber in United States federal court, accusing one of the company’s US executives of meeting “with Delhi police and intentionally obtaining” the victim’s “confidential medical records.” 

“Uber executives duplicitously and publicly decried the rape, expressing sympathy for plaintiff, and shock and regret at the violent attack, while privately speculating, as outlandish that it is, that she had colluded with a rival company to harm Uber’s business,” the rape victim’s US lawsuit against Uber said, per IANS.  

That case was settled in December 2017.  

Not only will the DOJ decision to close the investigation hamper efforts to hold accountable any US persons who might have violated federal anti-bribery laws, but it also is likely to hinder efforts in India to identify and reprimand any police officers and/or hospital workers who may have illegally exchanged confidential information for monetary payments.  

“With the US Department of Justice closing the probe against the Uber [sic] in their bribery case and in Delhi, the Office of Commissioner of Police is turning a blind eye to the matter, it will now be nearly impossible to trace and probe the errant cops who took bribes in the case,” Sumit Kumar Singh wrote for IANS.  

The closing of the DOJ probe has received little media attention in the United States. Despite resigning as CEO in 2017, Kalanick, a company co-founder, remained on Uber’s board of directors until December 31, 2019, at which time he resigned his position and sold the vast majority of his remaining Uber shares, estimated to be worth approximately $2.5 billion.  

Despite the probe’s ending, Uber continues to face potentially existential legal challenges on numerous fronts. Thousands of the company’s own drivers have filed lawsuits and arbitration actions challenging Uber’s classification of them as independent contractors rather than employees, and states like California have begun to pass laws making it more difficult for gig-economy employers to continue to treat workers as independent contractors.    

Additionally, scores of alleged sexual assault victims have sued Uber attempting to hold the company responsible for the criminal acts of its drivers. These lawsuits accuse Uber of having emphasized profit and explosive growth over passenger safety through a lax driver screening process and a compromised complaint-reporting system, which reportedly puts pressure on company investigators to place Uber’s interests ahead of those of the alleged victims.  

Source:  

 Singh, Sumit Kumar. (21 January 2020). Rape case: US Justice Dept shuts probe on Uber bribery charges. MENAFN. IANS.

Uber Lawsuit News: Cab Union Lawsuit Leads To Uber Ending Ride-Share Operations In Colombia

January 16, 2020
Author: Daniel Gala

In a victory for local opponents to the San Francisco-based ride-sharing giant, including taxi driver unions, Uber announced on January 10 that it will be ceasing operations in the country of Colombia following protracted legal and regulatory battles there.

The change, which will become effective February 1, follows a December 2019 ruling by Colombia’s Superintendency for Industry and Commerce that had ordered Uber to cease its ride-sharing operations in the country. 

According to Uber, the company had 2 million customers and 88,000 drivers in Colombia, where it has been operating for six years. 

The December ruling by the Superintendency for Industry and Commerce was the product of a lawsuit filed by a Cotech SA, which offers a competing app platform that connects passengers to taxi drivers. 

The announcement marks just the latest setback for the embattled ride-sharing giant, which has seen itself subjected to increased regulatory scrutiny over concerns about passenger safety and the company’s characteristically aggressive business practices. Previously, Uber had been shut out of the city of London, one of its most important overseas markets, after regulators there refused to renew its license, and the platform has been banned in Italy since 2017. 

Uber, which has achieved disappointing results since its highly touted IPO in May 2019, has been under legal attack on numerous fronts, facing lawsuits not only from taxi unions and other competitors who accuse the company of unfair business practices, but also from drivers suing over their employment status, and passengers seeking to hold Uber liable for the criminal acts of its drivers, including numerous alleged sexual assaults. 

Following the victory over Uber, Colombian taxi union leader Hugo Ospina pledged to keep up the fight against similar platforms. 

“We are now going after Didi, Cabify, and Indriver,” Ospina pledged, according to the Associated Press, naming his intended targets, which also included companies that operate electronic scooter rentals. 

While taxi drivers and ride-for-hire companies heralded Uber’s announced departure from the Colombian market as a reason for celebration, others feared that it would hinder future investment from similar companies. 

“The government says it wants foreign investment, innovation, and technology, but the nation’s regulatory framework is ossified,” Sergio Guzman, a risk analyst who specializes in the Colombian market, told the AP. “And it’s reluctant to accept new technologies.” 

According to Bloomberg, many Colombians prefer Uber rides to taxis, seeing them as a safer alternative, with taxi-cab robberies and kidnappings being a risk in the country. 

However, that local efforts were able to force the retreat of a multi-billion-dollar global tech giant likely will provide further motivation for Uber’s opponents elsewhere, with Colombia providing a template for how legal and political leverage can be applied effectively against the controversial company, which many accuse of acting illegally by circumventing rules that apply to traditional taxi drivers and other licensed ride-for-hire providers, oftentimes to those competitors’ detriment. 

Uber’s announced decision to cease its Colombia ride-sharing operations will not impact operations of its food-delivery service UberEats, which will continue to do business in the country. 

Sources: 

Associated Press. (10 January 2020). Lawsuit forces Uber to stop operating in Colombia

Bristow, M. and Medina, O. (10 January 2020). Uber to Quit Colombia After Judge Says it Doesn’t Compete Fairly. Bloomberg

Uber Lawsuit: Del. Supreme Court Upholds Dismissal Of Uber Investor Lawsuit Over Purchase Of Self-Driving Startup

January 16, 2020
Author: Daniel Gala

The Delaware Supreme Court has upheld a lower court ruling dismissing a shareholder lawsuit filed by an Uber investor over the company's $680-million purchase of a company developing technology for self-driving vehicles. Uber was later forced to pay a nine-figure payout to Waymo over allegations that much of the company’s self-driving technology had been stolen from the Google-owned self-driving competitor. 

The Delaware lawsuit was filed by a former Uber employee and current shareholder who accused the company’s board of failing to conduct due diligence in the purchase of the company started by former Google engineer Anthony Levandowski, who since has been charged criminally for allegedly stealing intellectual property from his past employer, which he then took to his new company, which he then sold to Uber. 

The decision by the Delaware Supreme Court did not reach the merits of the case, with the three-judge panel conceding that the deal for Levandowski’s company, which was approved by Uber’s directors, was a “flawed transaction”. Instead, the court agreed with a previous ruling that the plaintiff had failed to follow the procedures required under Delaware law prior to the filing of such a case. Namely, the plaintiff had failed to request that Uber’s board take action by filing its own lawsuit, or make an adequate showing that such a request would be “futile”. 

While an attorney for the plaintiff had argued that such a request would have been futile given the board’s ties to former Uber CEO Travis Kalanick, who approved the purchase and is a defendant in the lawsuit, the court disagreed, noting that the directors have the power to determine who the company will sue, or not sue, as the case may be. 

“Under Delaware law, the board of directors manages the business and affairs of the corporation, which includes deciding whether the corporation should pursue litigation against others,” the three-judge panel wrote, according to the Associated Press.  

Kalanick left the role of CEO at the company he helped found in 2017 after a highly controversial tenure that included allegations that he had helped foster a misogynistic “tech bro” culture that allowed sexual harassment and other problematic behavior to run rampant. Though Kalanick had remained on the Uber board after his departure as CEO, he announced in December 2019 that he was leaving the company completely, cashing in approximately 90% of his remaining Uber stock, estimated to be worth roughly $2.5 billion. 

Source: 

Associated Press. (13 January 2020). Delaware Court Refuses to Revive Uber Shareholder Lawsuit

Uber News: Another SoCal Uber Driver Arrested For Alleged Sexual Assault Of Passenger

January 13, 2020
Author: Daniel Gala

Just days after a former Southern California Uber driver was arrested for allegedly sexually assaulting a female passenger during a ride home from a police station, another Uber driver has been placed under arrest by police in Fontana, California for the alleged rape of an intoxicated passenger. The two incidents are just the latest of thousands of sexual assaults reported to have taken place via the Uber platform, leading critics to voice concerns that Uber is not doing enough to protect passengers and, in some instances, the company’s drivers themselves.   

“What the rider reported to police is extremely disturbing and has no place in our community,” said Uber spokesperson Navideh Forghani, who also said the accused driver has been removed from the service, according to the Los Angeles Times.   

While the statement represents Uber’s standard response to such incidents, the ride-sharing platform has been under increasing scrutiny to take greater measures to protect its passengers.   

In the latest incident, a female passenger says she was extremely intoxicated when she hailed a ride on the Uber platform. The passenger told police that she either passed out or fell asleep in the vehicle during her ride, and when she awoke the driver was sexually assaulting her.   

Police say the alleged perpetrator later called police himself to claim that, though he had sex with an intoxicated passenger in his vehicle, the sex had been consensual.   

A number of ride-sharing passengers who allegedly have been sexually assaulted by Uber drivers have taken to suing the company itself, seeking to hold Uber responsible for the alleged criminal acts of its drivers. Under a legal doctrine known as respondeat superior, an employer can be liable for its workers’ conduct—even criminal behavior—if that behavior occurred within the normal scope of the worker’s employment.   

Uber has been accused both of failing to adequately screen new drivers before exposing them to passengers in potentially compromising situations and of failing to take appropriate measures when complaints are filed against existing drivers.   

The embattled ride-sharing giant, which has seen its stock price plummet since its highly touted IPO in May 2019, also has faced thousands of lawsuits and arbitration demands filed on behalf of drivers challenging their status as independent contractors rather than employees.   

Additionally, Uber has been subject to recent pushback from regulatory authorities representing municipalities like the city of London and even countries like Colombia, which have challenged the company’s right to operate in their jurisdictions.   

Sources:  

Wigglesworth, A. (12 January 2020). Uber driver arrested on suspicion of raping passenger in Fontana, police say. Los Angeles Times    

Shalby, C. (10 January 2020). Uber driver charged for sexually assaulting woman two summers ago, authorities say. Los Angeles Times

Uber News: Former SoCal Uber Driver Arrested For Alleged Sexual Assault On Passenger

January 13, 2020
Author: Daniel Gala

A former driver for ridesharing giant Uber was arrested January 8 on charges that he allegedly sexually assaulting a passenger in 2018 after picking the woman up at a police station.  

In the summer of 2018, the 25-year-old alleged victim had been arrested on drunk driving charges and, upon being released by police, hailed an Uber to give her a ride from the police station in Tustin, California to her home in Santa Ana.   

However, on the ride home, the woman allegedly was sexually assaulted by her 45-year-old Uber driver.   

“Somewhere along the way, [the Uber driver] stopped and sexually assaulted the victim,” Santa Ana police said in a news release quoted in part by WQAD. “This was confirmed through DNA evidence.”   

Police further say that the alleged perpetrator confessed to the sexual assault after his arrest.   

For its part, Uber issued a statement saying that the individual is no longer a driver for the company.   

“We removed the driver’s access to the app back in 2018 after we learned of this disturbing incident,” Uber said, per WQAD.   

The incident is hardly the first alleged sexual assault or other violent crime claimed to have been perpetrated by an Uber driver. In the face of harsh criticism over Uber’s approach to passenger safety—particularly when it comes to adequately screening drivers before employing them and responding proactively to passenger complaints—Uber released in December 2019 its first annual safety report, which showed that thousands of sexual assaults had been reported on its platform in 2018 alone.   

In an effort to hold the company accountable for putting passengers into a vulnerable situation with potentially dangerous drivers, a growing number of alleged victims of sexual assault and other crimes have sued Uber over the actions of its drivers.   

For example, just days before the arrest of the former Uber driver in Southern California, an Oregon woman sued Uber for $1 million over an alleged sexual assault perpetrated by an Uber driver.   

 Sources:    

WQAD Digital Team. (10 January 2019). Uber driver allegedly sexually assaulted woman he picked up from police station after DUI arrest. WQAD    

Uber Technologies, Inc. (December 2019). 2017-2018 US Safety Report   

Ramakrishnan, J. (8 January 2020). Hillsboro woman sues Uber for $1 million, alleging sex assault by driver. The Oregonian

Uber Lawsuit News: Oregon Woman Sues Uber Over Alleged Sexual Assault By Driver, Seeks $1 Million

January 10, 2020
Author: Daniel Gala

An Oregon woman has sued ride-sharing giant Uber over an alleged sexual assault committed by an Uber driver while the woman was a passenger in his vehicle, The Oregonian reported January 8. The woman is seeking $1 million in damages.   

The alleged incident took place roughly two years ago, in January 2018. After a night out having drinks with friends, the plaintiff says she hailed an Uber ride at about 3:30 am. When her Uber arrived, the driver would not allow her to sit in the rear seats, keeping the doors locked and forcing her to sit beside him in the front seat, even though Uber recommends against passengers riding in the front seat, particularly when riding alone.   

After she rebuffed the driver’s sexual advances, the plaintiff says he sexually assaulted her in his vehicle. Upon departing the vehicle at her destination, the plaintiff claims to have immediately told her boyfriend about the incident, at which point she contacted Hillsboro police. She filed a police report and had a sexual assault forensic examination performed at a hospital.   

The alleged perpetrator was charged in June 2018 with four counts of sexual assault, but, more than a year later, he was acquitted by a jury.   

Tragically, the plaintiff is just the latest to sue the ride-sharing giant seeking to hold it accountable for the alleged misdeeds of its drivers, including sexual assaults and even killings. Under the legal doctrine of respondeat superior, an employer can be held responsible for the conduct of its worker if done within the scope of the worker’s employment.   

In its rush for growth, which required amassing a fleet of millions of drivers as quickly as possible,  Uber has been accused both of failing to adequately screen new drivers and of turning a deaf ear to passenger complaints about existing drivers.   

Source:   

Ramakrishnan, J. (8 January 2020). Hillsboro woman sues Uber for $1 million, alleging sex assault by driver. The Oregonian

Uber Lawsuit News: Inside Uber’s Lawsuit Calling California Worker Rights Bill ‘Unconstitutional’

January 7, 2020
Author: Daniel Gala

Since Uber, Postmates, and two individual plaintiffs filed on December 30 a lawsuit calling California’s new worker rights law—which took effect January 1, 2020—“unconstitutional”, the case has received national, and even international, media attention.  

However, lacking from many of these reports has been a detailed analysis of exactly why the plaintiffs say the law, known as AB 5 after its number in the California state assembly, is unconstitutional, or even to which constitution(s) they are referring.  

To that end, TheLawFirm.com presents this closer look at the legal nuts and bolts of Uber’s latest lawsuit, one that seeks to undermine a law that specifically was passed as a challenge to the business models of gig-economy employers like the embattled ridesharing giant.  

“Plaintiffs Lydia Olson and Miguel Perez (together, ‘Individual Plaintiffs’), and Postmates Inc. (‘Postmates’) and Uber Technologies, Inc. (‘Uber’) (together, ‘Company Plaintiffs’) filed this Complaint for declaratory, injunctive, and other relief determining that California Assembly Bill 5 (‘AB 5’)—a recently enacted statute that becomes effective on January 1, 2020—is unconstitutional,” the new federal lawsuit, filed in the Central District of California, begins. “AB 5 violates the Equal Protection and Due Process Clauses of the Fourteenth Amendment to the United States Constitution, the Ninth Amendment to the United States Constitution, and the Contracts Clause of Article 1 of the United States Constitution, as well as the Equal Protection Clause, Inalienable Rights Clause, Due Process Clause, Baby Ninth Amendment, and Contracts Clause of the California Constitution.”  

We will examine each of these arguments in turn.  

  First & Second Counts: United States Constitution and California Constitution – Equal Protection Clauses  

The first and second counts of Uber and Postmates’ lawsuit argue that California’s AB 5 violates the equal protection clauses of the US and California constitutions because, they contend, it unfairly treats companies like theirs differently than other companies without a rational basis for doing so.    

“AB 5 violates the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution because it draws classifications between network companies and non-network companies without a rational basis for distinguishing between the two groups,” the lawsuit argues.  

The supposed distinction between “network companies” and “non-network companies” is one drawn by the plaintiffs in the lawsuit itself, where it is described that so-called network companies “connect consumers requesting certain services with independent providers of those services.” According to plaintiffs, these kinds of companies “are sometimes referred to as ‘app-based platforms,’ ‘network companies,’ or ‘platform companies.’”  

Ratified in 1868, the Fourteenth Amendment to the US Constitution was passed in the aftermath of the Civil War as part of an effort by the federal government to enforce and maintain the civil rights advances obtained through that bloody struggle, particularly for African-Americans. In relevant part, Section 1 of the Fourteenth Amendment declares that “No state shall…deny to any person within its jurisdiction the equal protection of the laws.”  

In the 150 years of jurisprudence that has followed, courts have interpreted the Equal Protection Clause to apply with varying levels of scrutiny depending on the right or rights on which the state action is alleged to infringe. For example, legal precedent now has established that state actions impacting certain “fundamental” rights are to be approached with “strict scrutiny” by the courts, whereas state actions involving other purportedly “lesser” rights are not subject to such stringent second-guessing by the judiciary.  

Uber and its fellow plaintiffs argue that the rights at issue under AB 5 are of the “fundamental” variety and therefore should be subject to the court’s highest level of scrutiny.  

“Strict scrutiny review applies because AB 5 is designed to burden, and if enforced against independent service providers like Individual Plaintiffs and network companies such as Company Plaintiffs in a manner consistent with the sponsors’ stated intent would burden, the fundamental rights of network companies and workers to pursue their chosen profession and determine when and how they earn a living,” the lawsuit argues.  

In arguing that there is no rational basis to support AB 5’s alleged disparate treatment of certain companies and workers, Uber and the other plaintiffs point to the numerous exemptions, exceptions, and carve-outs contained within the legislation.  

“The manner in which AB 5’s exemptions were created further confirms that the statute violates the Equal Protection Clause,” the lawsuit says. “Many exemptions resulted from ‘back door’ deals and political favors to industry groups—i.e., not a valid legislative purpose.”  

[Despite decrying this “back door” process, Uber and Postmates concede that they attempted to take part in the supposed scheme but were blocked from doing so: “Platform companies also sought an express exemption as the statute was moving through the California legislature, but were denied exemptions.”]  

Therefore, lacking a valid legislative purpose, the plaintiffs argue, the only possible explanation for the law is state lawmakers’ irrational, and unconstitutionally expressed, animosity toward these self-described “network companies.”  

“Not only is animus toward the on-demand economy the only possible explanation for the express exemption of a litany of similarly situated companies but not platform companies, but it is also the actual explanation for the scheme,” the lawsuit claims. “The public record is filled with statements by California legislators who voted for the bill, including the sponsor of AB 5, attacking platform companies specifically, targeting such companies in their support of AB 5, and stating their view that AB 5 will stop the purported ‘unscrupulous’ business practices of such companies.”  

In making the argument that the only possible explanation for lawmakers’ having passed AB 5 is an irrational hatred for companies like Uber, the plaintiffs ignore a number of more feasible explanations, also supported by the record, such as the possibility that lawmakers had a legitimate legislative interest in protecting the rights of gig-economy workers in their districts.  

Count Three: California Constitution – Inalienable Rights Clause  

The plaintiffs’ third count is based on an alleged violation of the Inalienable Rights Clause of the California Constitution, which is contained in Article 1, Section 1.  

“All people are by nature free and independent and have inalienable rights,” the clause states, as quoted in the complaint. “Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.”  

Uber, Postmates, and the two individual plaintiffs contend that AB 5 violates the Inalienable Rights Clause as it applies to them because it is a state action that irrationally interferes with their ability to pursue their own economic interests.  

“AB 5 violates [the Inalienable Rights Clause] because it infringes the rights of network companies and independent service providers to pursue their chosen profession, which is an essential component of liberty, property, happiness, and privacy,” the lawsuit alleges. “On-demand work is an occupation, even if it is a specific or particular one. AB 5 infringes the right to pursue this occupation.”  

Counts Four, Five, & Eight: US Constitution and California Constitution – Due Process Clause

Three counts of the 49-page lawsuit deal with alleged violations of the due process clauses of the US and California constitutions, with counts four and five specifically dealing with the right to pursue one’s chosen occupation.  

Again, Uber and the other plaintiffs point to public statements by backers of the legislation and the list of industries and professions expressly exempted from AB 5 as evidence in support of its claims.  

“The public record is replete with evidence showing that California legislators supported AB 5 in an effort to isolate and harm platform companies, if not put them out of business,” the lawsuit claims in count four, concluding later, “The malicious and arbitrary purpose of the statute—combined with the back-room dealing that led to its laundry list of irrational exemptions—creates a ‘wholly arbitrary’ standard in violation of due process.”    

Counts Six & Seven: US Constitution and California Constitution – Ninth Amendment / Baby Ninth Amendment  

Counts six and seven of the lawsuit challenging the constitutionality of AB 5 rely on the assertion that the court should recognize as among the “fundamental rights” a right “to work on one’s own terms.”  

“The language and history of the Ninth Amendment reveal that the Framers of the Constitution believed that there are additional fundamental rights, protected from government infringement, which exist alongside those fundamental rights specifically mentioned in the first eight constitutional amendments,” the lawsuit argues. “The right to work on one’s own terms—as an independent service provider, rather than an employee—is one of those fundamental rights.”  

Despite the novel nature of the plaintiffs’ claim that the supposed “right” to work as an independent contractor should be elevated to among the “fundamental rights” enshrined in the US and California constitutions, they offer no legal precedent or other specific facts to support this argument, instead incorporating the remainder of the complaint.  

  Counts Nine & Ten: US Constitution and California Constitution—Contract Clause  

The lawsuit next contends that AB 5 violates the contract clauses of the US and California constitutions. In its federal iteration, this clause states, “No state shall…pass any…Law impairing the Obligation of Contracts,” as quoted by plaintiffs.  

Essentially, Uber and its fellow plaintiffs argue that their constitutionally protected ability to contract would be hindered under AB 5 because the companies already have negotiated binding contracts with their workers, and these contracts call on the workers to be classified as independent contractors.  

“Company Plaintiffs are parties to valid contracts with the independent service providers who operate on their platforms, including Individual Plaintiffs,” the lawsuit says. “These contracts establish that the workers are independent contractors for the purposes of their work found by using the app-based platforms of the Company Plaintiffs.”  

It continues: “If AB 5 were enforced consistent with the sponsors’ intent in a way that required Company Plaintiffs to reclassify independent service providers who use their apps as employees, this would invalidate these existing contracts between Company Plaintiffs and the independent service providers who operate on their platforms, including Company Plaintiffs’ contracts with Individual Plaintiffs.”  

While plaintiffs contest that AB 5 would “impose new obligations under the existing contracts” that the parties themselves “did not voluntarily agree to undertake,” one could think of numerous regulatory and other examples in which state actions have had analogous impacts on existing contractual relationships but have not been found to violate either of the constitutions’ contract clauses.  

Count Eleven: Injunctive Relief  

The eleventh and final count of Uber’s lawsuit calls on the court to grant injunctive relief, that is, to legally prevent AB 5 from taking effect. Uber and the other plaintiffs request both preliminary and permanent injunctive relief, meaning that they are requesting that the court both place AB 5 on hold pending the outcome of this litigation and stop AB 5 from taking effect at any point in the future.  

“Defendants should be preliminarily and permanently enjoined from enforcing AB 5 against Company Plaintiffs,” the lawsuit’s final count argues. “If enforcement of AB 5 were to force the reclassification of Individual Plaintiffs from independent contractors to employees, Independent Plaintiffs would suffer severely and irreparably.”  

The individual plaintiffs, both gig-economy workers, “both rely heavily on this independence and flexibility for their income, and because they care for ailing and struggling family members. Absent an injunction, they will suffer severe irreparable harm.”  

The same goes for Uber and Postmates, the company plaintiffs, according to the lawsuit, which argues these businesses “would incur immediate injury for which there is no adequate remedy at law, including because the statute violates their constitutional rights, threatens their business models, and forces them to incur unrecoverable administrative and compliance costs,” adding, “Constitutional violations constitute per se irreparable harm.”  

Conclusion  

Throughout their lawsuit, Uber, Postmates, and the two individual plaintiffs rely heavily on two pieces of evidence in making their case that AB 5 violates a number of provisions under the state and federal constitutions.  

First, Uber and its fellow plaintiffs repeatedly point to the “public record” as supposed evidence that “hostility towards the on-demand economy held by Assemblywoman [Lorena] Gonzalez and many of her colleagues in the California legislature ultimately led to the passage of AB 5,” arguing that this animosity—and not a true desire to protect the rights of vulnerable workers, many of whom are Assemblyperson Gonzalez’s constituents—was the real motive behind the law.  

Second, Uber further argues that this supposed motive of animosity to the “on-demand economy” and companies like Uber and Postmates is laid bare by the large and, in the plaintiffs’ view, arbitrary number of exceptions under the law, which they say proves that the law is merely a means of targeting their business models to the exclusion of others.  

Whether the courts ultimately will find the claims of unconstitutionality asserted in the lawsuit to be supported on such relatively thin evidence remains to be seen, but Uber and the other plaintiffs consistently ignore the fact that the very state legislators who passed AB 5 and the governor who signed it into law are each elected officials who hold their positions subject to the will of their constituents, not multi-billion-dollar transnational corporations.    

  Sources:

United States District Court Central District of California Western Division. (30 December 2019). Complaint For Violation of Federal and California Constitutional Rights, Declaratory, Injunctive, and Other Relief. Demand For Jury Trial. Case No. 2:19-cv-10956. Lydia Olson; Miguel Perez; Postmates Inc.; and Uber Technologies, Inc., Plaintiffs, v. State of California; Xavier Becerra, in his capacity as Attorney General of the State of California; and “John Doe,” in his official capacity, Defendants  

United States Constitution. (1868). Fourteenth Amendment

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