Friday, July 10, 2015

Uber Battles Game Changing Government Regulation

This is an important battle for Uber to win.

Slate explains:
On Thursday, Uber filed a motion to oppose letting a major lawsuit that could undermine its business model proceed as a class action. The suit, which argues that Uber has misclassified its drivers as independent contractors when they are in fact employees, could have huge ramifications for Uber’s worker structure as well as the entire “sharing” or “1099” economy. Uber is very rich, with billions upon billions of dollars of funding, and so far very successful. But a ruling that its drivers should be considered employees could unleash a cascade of new and quite expensive costs, such as health benefits and reimbursement for on-the-job expenses like gas. It would also open Uber up to lots more liability, as drivers would gain the legal protections afforded to traditional employees.

Not surprisingly, Uber is going all out to fight this potential doomsday scenario. And in a 52-page filing, the company, which is being represented by attorneys at Gibson Dunn, lays out its arguments against treating the case as a California class action covering 160,000 current and former Uber drivers.

At the heart of Uber’s arguments is the notion that, fundamentally, there is no such thing as a typical Uber driver, and so lumping the concerns of 160,000 together would be entirely wrong. The plaintiffs “based their motion on a facially implausible theory that each and every one of these individuals had an identical relationship with Uber and has been misclassified as an independent contractor,” the filing states. To support this, Uber first notes that its drivers in California (and in the rest of the country) operate under one of 17 different licensing agreements. The various agreements evolved both as Uber revised its terms over time and at the discretion of local teams in different cities, and they differ in some fairly substantial ways. Some contain an arbitration provision; others do not. Some prohibit the driver from accepting tips; others don’t. Perhaps most crucially, some give Uber and its drivers the mutual right to terminate their relationship “without cause,” while others reserve that right unilaterally for Uber.


1 comment:

  1. This is an important dispute and Uber offers an interesting defense. But this dispute will ultimately be resolved by counting noses. Its not about justice its about politics. And politics has become the art of stealing and killing and getting away with it. If Uber has enough public support they might win this particular battle. But eventually they will pay more taxes and suffer more regulation. Politicians are very good at this activity.