Uber fires back in class-action suit

Uber fired its latest salvo Thursday against three California drivers who say in a class-action lawsuit they have been inappropriately classified as independent contractors.

In a filing with a federal court in California, the ride-hailing company said that the three drivers should not be allowed to bring the lawsuit as a group. In the process, the company revealed part of its argument in one of the most contentious policy debates related to the fast-growing “on demand” economy.

{mosads}Independent contractors are not entitled to many of the benefits and protections afforded to full employees. The line between contractor and employee isn’t always clear, but officials make the determination based on how much control a company has over its workers.

In its filing, Uber claimed that the experiences of individuals drivers vary widely. The company pointed out that the way that drivers are trained to use the app can be in person or online and that the contract agreed to by drivers has changed 17 times during the timeframe of the class action.

Uber also said the three plaintiffs did not represent the majority of drivers, who the company said appreciated working as contractors.

“Plaintiffs, three individual drivers, seek an outcome that many, if not most, proposed class members oppose — a classwide determination that would destroy the very independence and flexibility that countless drivers love about Uber,” the company said in its filing with the court.

To bolster its case, Uber submitted declarations made by more than 400 drivers who support their contractor status.

“I extremely value the flexibility that Uber gives me because for the last 30 years I’ve worked independently,” said Larry Adams, who drives in the San Francisco Bay Area. “I worked briefly on an employee basis and I didn’t like the control the employer had over me.”

The company also submitted to the court testimony from a University of California, Berkeley, economist Justin McCrary — who examined the declarations made by the drivers.

“Each driver’s relationship with Uber is unique,” he wrote. “This is not unexpected; indeed, I am not aware of any evidence that Uber exercises control uniformly, reserves the right of control uniformly, or has any uniform policy describing control over the physical conduct of drivers’ work.”

The lawyer bringing the class action suit pushed back against Uber’s arguments.

“We are not surprised by it and were expecting Uber to make the arguments it has made here, including its claim that many drivers like working for Uber and the flexibility it provides,” said Shannon Liss-Riordan in a statement.

“But the law is clear that the relevant question is not whether people ‘like’ the practice at issue but whether it legal or not. Employees can have flexibility also, and the mere fact that drivers can choose their hours does not make them independent contractors,” she added. “If it did, then this would be an easy question, and the court would have granted Uber’s motion for summary judgment, which it denied in March.”

A judge has ruled that the case can go before a jury.

The regulatory battle over how to treat workers at companies like Uber and Airbnb is being closely watched. Contract workers have fueled the growth of many of the companies — Uber is reportedly raising money at a $50 billion valuation — and they say unfavorable judgments by the courts could severely hamper their businesses.

Lawmakers and regulators in Washington are starting to take up the cause. Sen. Mark Warner (D-Va.) said last month that he and his colleagues need to consider ways to build a safety net for workers in the on-demand economy. The Federal Trade Commission also held its first workshop on the topic in June.

But there has already been motion by some companies to move away from the contractor model. Instacart, a grocery delivery service, said last month that it would change some of its contractors to full employees.

Shipping service Shyp said last Wednesday that it would make all of its couriers full employees, who will now get workers compensation and other benefits. The company will also pay their vehicle expenses. In a note, Shyp CEO Kevin Gibbon suggested that the company had found its plans were limited by using contract workers.

“As a rapidly growing business, we want to ensure that each time a customer uses Shyp they have an incredible experience,” he said. “For this reason, we want to provide our couriers with additional supervision, coaching, branded assets and training, which can only be done with employees, so a shift is needed.” 

This story was updated at 10:14 a.m.