Taxi drivers protest in front of city hall against the Uber ridesharing auto service in Toronto December 9, 2015.
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In a ruling on Wednesday, U.S. District Court Judge Edward Chen in San Francisco certified an additional class of drivers in the suit.
Currently, Uber considers those drivers independent contractors, not official employees of the company, meaning they must shoulder those expenses themselves.
The case is Douglas O’Connor et al v. Uber Technologies Inc, US District Court, Northern District of California, No. 13-3826.
Reached by phone, Shannon Liss-Riordan, the lawyer bringing the case against Uber, said she was “very pleased” by Chen’s ruling.
Uber responded by saying it would immediately appeal Chen’s decision. They’ve also said that a ruling that adds many more drivers is an even bigger liability for Uber because a victory for the drivers at trial threatens to upend the ride share company’s business model and cut into its more than $50 billion valuation.
At the current time, Uber considers its drivers essentially as freelancers, a classification that frees it from driver-related responsibilities such as Social Security, unemployment insurance, and workers’ compensation, thereby helping it to vastly reduce its operational costs. Chen, however, refused to expand the class to include drivers who drove for Uber under corporate names or through third-party transportation companies: “Plaintiffs provide no proof that they would define and determine who would fall into this category”.
Uber hit back, arguing that it doesn’t control its drivers like an employer would an employee, and drivers are free to be their own bosses.
Chen allowed the drivers in September to press their claims as a group, seeking tips allegedly denied them as independent contractors. Liss-Riordan also said expense reimbursement was the primary damages claim in the case. At the same time, the judge limited the size of the group to what Uber said is less than 10 percent of its 160,000 drivers in California.
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In a major setback for Uber, a federal judge on Wednesday dramatically expanded the scope – both financially and in number of drivers affected – of a class-action lawsuit by California drivers seeking to be reclassified as employees.
