Uber Settles with Drivers in Employment Lawsuit in Los Angeles

By now, most everyone is familiar with Uber.  The company makes a smart phone app that you can download and use when you need a ride.  When the company first started, it was primarily a black car service.  The company got limo drivers to sign up for the service and agree to pick up customers for rides during the time they were not working on their regular jobs.

iphone5While this was initially good for black car drivers, it essentially put black car companies out of business, because everyone just gets an Uber ride now instead of calling for a traditional black car service.  Then the taxi drivers became upset that someone with no special insurance, and no background check, and no hack license could pick up fares and steal their business.  As a result, you can now call a cab on Uber. 

The next change came with Uber X where anyone with a late model car could pick up riders.  These are not even professional drivers, and they are not driving commercial motor vehicles.  However, despite all the changes, the service has grown in popularity to the point where nearly everyone has used the service as some point, and many use it on a regular basis.

However, the company wants to claim they are a ridesharing app and not a car service.  In other words, they help people looking for a ride and find someone willing to give rides for a fee.  They essentially try to claim that they are a smart phone based form of the old classified ads.  This could not be farther from the truth, so the question is why do they want to claim they are a classified provider.  The reason is quite simple: if they don’t have employees, they do not have to carry workers’ compensation insurance, are not liable for any injuries caused by the drivers to others, and do not have to provide any benefits.

As a result of what many drivers consider to be a very unfair way to run a business, some drivers went to the employment commission in California, and there were a couple of decisions that these drivers are in fact employees and not independent contractors, as the company would like to claim.  In Los Angeles, this is known as employment misclassification.  While the decisions went in favor of the few workers who filed claims, there is not binding authority on behalf of the court cases, because it is not state law.  However, many upset drivers filed a class action lawsuit on grounds of employment misclassification.

This case recently reached settlement, according to a feature in the Los Angeles Times, and Uber has agreed to pay the plaintiffs up to $100,000.  However, they have avoided any type of judgment that would make them classified as an employer by settling, and this is likely one of the major reasons they agreed to settle the case. To prevent this from being a problem in the future, the company said it will have less control over the drivers, and they will actually be independent contractors.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 714-937-2020.

Additional Resources:

Uber will pay up to $100 million to settle suits with drivers seeking employee status, April 21, 2016, LA Times, By Tracey Lien

More Blog Entries:

Workers’ Compensation and Employee Misclassification Issues, Jan. 19, 2016, Orange County Farm Worker Rights Lawyer