Uber Driver Legal Issues
Last Updated on July 20, 2016 by Rideshare Community Support
Uber Driver Legal Issues: ☀Are Uber Drivers Employees or Independent Contractors?☀
We are thrilled to see that so many people are supporting the Uber driving platform! However, there seems to be a bit of confusion when it comes to are drivers employed by Uber or not. We are here to tell you now that Uber do NOT own cars nor are drivers employed by them. Drivers operating on the Uber system are in deed [independent contractors].
Now, don’t get it twisted if you think that an independent contractor is anyway less credible then being an employee of Uber.
Not at all.
In fact, most drivers prefer to be what we call a [free agent]. Most drivers would rather set their own hours and work on their own time. But… even with this sort of flexibility and freedom some are still not happy with the way the tech giant operate. Lets discuss further here.
Uber Independent Contractor Lawsuits
Sadly, driver wages comes to haunt Uber as the company gets hit with two additional lawsuits!
After settling to past driver lawsuits, the global ride-hailing giant Uber faces two more lawsuits from drivers belonging from Florida and Illinois. The new lawsuits claim that the company is to be held accountable for violating the Fair Labor Standards Act, and the drivers seek to recover unpaid wages and other miscellaneous expenses, as reported by the Los Angeles Times. The lawsuit filed in Illinois also aims to recover the damages caused by what some are calling “Uber’s misleading messages to riders mostly regarding tips.”
These lawsuits are the first ones to have emerged against the company after they paid a settlement amount of $100 million in previous cases. Even though the amount can be considered as a huge price tag, it somehow isn’t that big of a deal for a company that has raised more than $8 billion of funding. The company’s business model of retaining drivers status as independent contractors is essential for them to maintain, as it is a fundamental of the enterprise.
Also as a part of the settlement proposal, Uber said that it would allow drivers to make their own associations and adjust policies accordingly regarding deactivating drivers. It is also clarifying the language used in regards to gratuities, to efficiently communicate to the riders that they may tip drivers if they please, but not via the app.
Out of the $100 million payment that has been proposed, around $84 million is guaranteed to be received by drivers. The company could also be paying out $16 million in addition to the 84, but only if their valuation grows by 150% above its December 2015 financing round within just a year after any starting public offering. Uber was valued at $62.5 billion in December’s funding round of 2015. Some changes to the business practices were agreed upon, which included the policy for deactivating drivers.
In earlier reports, some drivers had complained that Uber arbitrarily terminated them from using its platform. Travis Kalanick, chief executive of Uber, said in a blog post that the company is pleased with the deal that the drivers are to operate as independent contractors and not employees. This settlement is quite similar to what was agreed upon by Lyft and the drivers this year. According to statistics, over 450,000 US drivers use the Uber app every month, which makes the company’s operation much more larger than any of its rivals.
The Uber deal would require approval by US District Judge Edward Chen in San Francisco. The judge must decide if the $100 million settlement amount is fair. This deal represents about 12% of the $ 852 million in potential damages, which the drivers would be entitled to should they be declared as employees and not as contractors.
According to the attorneys representing Uber drivers, potential damages, in this case, have been evaluated at $852 million, when the claim to recovering tips are included. The figure has been arrived at by calculating rates for mileage reimbursement as decided by the US government and on data recorded by Uber Technologies Inc.
However, the company’s attorneys have estimated the value of damages at $429 million because of lower mileage rate calculation. According to new data revealed, the proposed $100 million settlement will keep the drivers classified as contractors, though the senators of US are currently reviewing the issue.
The case was to go on trial on June 20, 2016. However, Uber’s request for appealing the trial court’s ruling was immediately granted by the Ninth Circuit on April 5, 2016. The trial court’s decision had determined that the arbitration clause of Uber was unenforceable and certified as a class action that would cover most drivers operating in California. Uber had moved to push back the trial so that they may appeal to the Ninth Circuit first. However, the request was suspended when the $100 million settlement was reached.
This has been a landmark case in more aspects than one as the global taxi service giant had to pay the settlement amount for non-reimbursement of expenses. The decision by the court has shown that reach of law extends quite far and is always with those who are just and deserving.
Top Asked Questions:
Q. Should I apply to drive for Uber after all of this?
A. Absolutely. As long as you fully understand that Uber is not your employer, but instead you are an independent business owner leasing their app, you will be good. At any rate, you shouldn’t let Uber driver legal issues deter you from being the best driver you can be! Please apply today!
Q. Should I consult an attorney first?
A. If it’s in your budget to seek counsel, we say go for it! Your lawyer should be able to go through Uber’s terms with you and answer any questions from a legal stand point.
Q. I don’t like the idea that Uber can fire me!
A. Since you will not be employed by Uber, then they cannot fire you in that sense. But, they can deactivate your account if you violate their terms. The best thing you can do here is actually read over their policy and terms before signing it. That way, you will better understand what kind of activity goes against it. Allowing you to proceed with caution.