Setback for Uber on drivers’ class action case

By December 10, 2015

Uber suffered a setback in a landmark class-action lawsuit on Wednesday, as a California judge ruled to expand the class of drivers who can participate and the types of reimbursement they can seek.

The case, which is set to be tried by jury in June, centers on the question of whether Uber drivers should be treated as full employees rather than contractors.

It is being closely watched as an indicator of how employment laws will be enforced in the “sharing economy”, in which companies tap legions of freelance contractors as their workforce.
A loss could weaken Uber’s business model, which is based on taking a share of the proceeds from drivers who use the app to find customers.
If the plaintiffs win Uber would have to compensate drivers for tips and, after Wednesday’s ruling, compensate them for expenses incurred on the job as well, such as petrol and wear and tear on the vehicle.
Michael Landen, a partner at Kluger Kaplan specialising in employment litigation, says the case could have ramifications for other companies. “Technology drive businesses have changed the employee/employer relationship,” he said. “For an Uber, you have a totally different type of animal in terms of how the relationship works for these people being compensated.”
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