A group that represents 5,000 Uber drivers in New York is filing a class-action lawsuit against the rideshare app, arguing that Uber misclassifies its drivers as independent contractors and accordingly has failed to pay its employees overtime when they frequently work 40 hour-plus weeks. This lawsuit comes just as a California judge weighs settlement options in a similar suit, whose settlement—which could be as much as $100 million—will mean that Uber and Lyft drivers there remain classified as independent contractors rather than employees.
This latest legal challenge to Uber's business model comes from the New York Taxi Workers Alliance, a nonprofit union that represents 19,000 drivers in the city and that has been critical of Uber's formation of a driver guild, which promises benefits but not employee status or collective bargaining power. Bhairavi Desai, the founder of the NYTWA, said in April that the guild arrangement "builds no power for the workers." Several years ago, the group established a fund that would offer healthcare and disability services for its drivers, but a judge deemed the fund unnecessary and suggested that drivers were responsible for their current health problems because they'd previously neglected preventative healthcare.
Now, NYTWA is suing along with 10 Uber drivers, claiming that they have in effect been working for Uber as employees, not contractors, and should thus be entitled to minimum wage, overtime pay, and reimbursement for Uber-related expenses. The group is seeking class-action status for all Uber drivers in the New York area, and Desai has called the lawsuit "Uber's most formidable legal challenge" to date.
"This 'gig' or 'on-demand' economy cannot be viewed uncritically, for behind every customer seeking a fast ride is a worker, often working 60-80 hour weeks, who is denied the basic rights of employees," the suit states. Later, it argues that "after working for Uber continuously for years, laboring for twelve-hour shifts, for six or seven days a week, these workers simply cannot be considered independent contractors performing a 'gig.'"
Uber, meanwhile, is suggesting that this suit from the Taxi Worker's Alliance is hypocritical: in a statement, Uber spokesperson Matthew Wing said that "this is a thinly veiled stunt by a group that claims to represent taxi drivers but is not raising any concern in this suit with [taxi drivers'] longstanding classification as independent contractors."
One of the plaintiffs in the case, Queens resident Bigu Haider, says that he purchased a Lincoln Town Car in 2013 when he began driving for Uber, as he was told by a general manger that it would satisfy the luxury requirement to drive in the Uber Black luxury fleet, where he could earn a higher rate. Haider paid out of pocket for the Town Car, with monthly payments of more than $500. But in 2014, the suit says, Uber changed its rules, deeming Lincoln Town Cars unworthy of the Uber Black service, and Haider is now left making his monthly payments while earning less money driving for UberX.
Then there's Cherno Jallow, a Brooklyn resident who started driving for Uber in July 2014, and purchased a Toyota Venza to drive for UberX. He pays $925 a month for the Venza, the suit states, plus nearly $300 per month for insurance, and typically works more than 60 hours a week to make those payments. Because of his independent contractor status, he doesn't earn any overtime pay from Uber for working significantly more than a 40-hour workweek, and didn't receive any reimbursement on the purchases he made to drive for the company. Following Uber's decision to cut UberX fares by 15% earlier this year, Jallow says that he worked nearly 90 hours in one week, sandwiched in between two 60-hour weeks.
The suit also details the many ways that it says Uber treats its drivers like employees: the company allegedly instructs drivers to keep their hair neat, asks them to tell customers how much they like working for Uber, telling drivers to keep candy, water, and phone chargers in their cars for the benefits of their passengers.
"Although Uber's rules are often described as 'suggestions,' Drivers understand clearly that failure to follow these guidelines results in temporary or permanent termination of their employment with Uber," the suit states.
Because the drivers named as plaintiffs are, for all intents and purposes, employees of the company, the suit argues, they are entitled to damages for unpaid compensation, both in the form of overtime and reimbursements. The lawsuit is also seeking a judge's order stating that Uber drivers are not independent contractors, but rather employees.