Uber has been the subject of lawsuits, regulatory battles and a lot of scrutiny from lawmakers. The ride-hailing company is currently operating under a temporary restraining order in Massachusetts – with more legal battles ahead for Uber.
The “uber class action lawsuit 2021” is a lawsuit that was filed against Uber. The case has been ongoing for a while, and the court date is set for 2021.
(As of October 31, 2017)
Since its inception in 2011, Uber Technologies Inc. (Uber) has been creating headlines. When the San Francisco-based business launched an app-based taxi service competition, it broke new ground. Uber, on the other hand, has been chastised for a slew of faults, ranging from recruiting unregistered drivers to price gouging consumers to undermining competitors. Protests have taken place to prevent Uber from operating in some locations and to demand that drivers be treated better.
Class action lawsuits have been filed against Uber, claiming that its drivers should be categorized as workers, not independent contractors, and so entitled to worker benefits.
Recently, class action lawsuits have been filed against Uber, claiming that its drivers should be categorized as workers, not independent contractors, and so entitled to worker benefits. If the plaintiffs win their actions, Uber’s business model, as well as the business models of other “on-demand” firms that operate over the internet and depend on contract workers, might be drastically altered.
Uber’s Brief History
Uber, the world’s most valuable business (at more than $60 billion), evolved from UberCab, a black-car service founded by Garret Camp and Travis Kalanick, two young entrepreneurs who intended to provide a taxi alternative in San Francisco. UberCab debuted in San Francisco in June 2010 after extensive testing in New York.
The early startup worked in the same manner that Uber does now: riders ordered a vehicle at their specified pickup location via a mobile app. The request was then accepted by a driver from UberCab’s network, who supplied the journey in their own car.
UberCab was an instant success, and the firm sought and received investor investment. In October 2010, UberCab changed its name to Uber, and in May 2011, Uber began in New York. Uber had expanded to Seattle, Boston, Chicago, Washington, D.C., and Paris before the end of the year.
In 2012 and 2013, the company accelerated its growth into new international markets. Uber is now accessible in hundreds of cities across dozens of countries, with new places added on a regular basis.
The company’s business model generates a slew of disagreements.
Uber has had disagreements with governments, taxi businesses, employees, passengers, rival ride-sharing companies, and even the media as it has grown.
The list of accusations against the tech corporation is broad and diverse (for example, read this Fortune article), but it mainly falls into three categories:
- Local governments have been against Uber because it is difficult to define and so regulate. Uber deems itself a technology firm rather than a transportation company, and is thus exempt from the restrictions that govern conventional taxi services.
- Taxi firms make some of the same concerns that governments do, notably, that Uber is not subject to the same rules as traditional taxi companies (i.e., taxes and licensing fees), resulting in unfair competition.
- Drivers have allegedly attacked several Uber clients. A six-year-old child was slain by an Uber driver, and another Uber driver has been accused of rape. Some of the problems were caused by drivers who had passed Uber’s background check.
- Uber drivers have organized rallies against the firm, demanding better compensation, treatment, and perks.
- Lyft, an Uber rival, has accused Uber of acting dirty in order to hurt its company.
- After a writer published a story critical of Uber, an Uber senior official advised digging up dirt on her. In reaction to negative coverage, Uber attempted to plant a phony article about its drivers in LA Weekly.
Uber drivers: are they independent contractors or employees?
The current Uber spat is on whether its drivers are independent contractors, as Uber claims, or employees, as many drivers claim in class action lawsuits throughout the nation.
“As employees, drivers would drive predetermined hours, get a fixed hourly rate, and lose the opportunity to drive using alternative ride-sharing applications as well as the personal flexibility they most appreciate,” according to Uber.
Uber drivers, on the other hand, say that they are Uber workers since they are subject to a “litany of precise rules placed on them by Uber” and are “graded, and susceptible to termination, depending on their inability to conform to these standards.”
When it comes to determining whether a person is a contractor or an employee, there is no obvious answer. Even the Supreme Court has said that there is no one-size-fits-all technique for establishing whether someone is an employee or an independent contractor. The problem will almost certainly come down to how the Department of Labor’s “economic realities” test is interpreted by state labor commissioners. The six-factor DOL exam covers topics like:
- The degree to which the task produced is a critical component of the employer’s operations
- The worker-employee relationship’s long-term viability
- Which side provides the necessary tools, materials, and equipment for the job?
- The extent to which the employer exerts control and the type of that control
- Profit and loss prospects for the worker
Uber drivers aren’t entirely employees or wholly independent contractors, according to these wide definitions. If the cases proceed to trial, the jury will decide on the worker categorization of drivers based on reasons similar to those listed above.
Worker Classification’s Consequences
Uber drivers are generally concerned with three categories of legal claims:
- They want their business-related expenditures, such as insurance and car upkeep, refunded (Uber drivers currently pay for all of their work expenses).
- They want to be paid the full amount of any tip or gratuity left for the driver (Uber drivers are not allowed to receive tips).
- They want more information on their driver ratings and business choices regarding when and why drivers are removed from the Uber marketplace.
However, by requesting to be categorized as workers, the drivers get access to a considerably broader range of benefits. Minimum wage and overtime pay, anti-discrimination regulations, employer matching for Social Security payments, and workers’ compensation are all benefits and protections that employees are entitled to.
While participants of the Uber class action are not seeking for these benefits, they will almost certainly be awarded them if they are classed as employees.
This has ramifications not just for Uber, but also for other organizations that operate on a 1099-worker basis. Workers are classified as contractors by Uber rival Lyft, delivery services GrubHub, DoorDash, Instacart, and Caviar, cleaning services Handy and Homejoy, and other sharing economy businesses, which save money on labor expenses. Many of these businesses, like Uber, are facing litigation seeking to reclassify their employees.
Freelancers have been touted as the on-demand economy’s hidden weapon. With a slew of litigation pending, several firms may be compelled to rethink their employee arrangements entirely.
A $100 million settlement has been rejected by a judge.
A federal court in Massachusetts and California rejected a $100 million class action settlement between Uber and 385,000 drivers in August 2016. The court said that the settlement, which had been widely criticized, was not “fair, sufficient, or reasonable.”
On April 18th, Uber and the city of Los Angeles reached a settlement that will allow the company to continue operating in the city. The settlement includes a $20 million payment to settle claims by drivers who said they had been misclassified as independent contractors. Reference: held and hines uber settlement 2020.
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