Ridesharing companies Uber and Lyft have been told by separate federal judges that class action claims against them must go to a jury for decision. The companies signed up drivers as independent contractors, but a class of drivers now wants the benefits of employee status and has sued in separate lawsuits against both companies.
The drivers, who signed up to make themselves available on smartphone apps to give rides for a fee, complain that there are too many rules to call them independent contractors, despite the fact that they determine their own hours and locations and in most cases use their own cars. They claim that Uber sets prices, monitors performance, and terminates those who fail to meet standards. Lyft drivers claim the company exercises control in other ways, terminating those who fail to meet certain "acceptance" ratings from passengers and imposes "Lyft rules" for drivers to follow while driving.
Uber and Lyft claim they are technology companies, not transportation companies, and that what they provide drivers is a "lead generation service" along with brand marketing.
The federal judge in the Uber case ruled that the facts were not clear cut, but that Uber looks more like a transportation company than a mere technology company, and that a jury would be needed to determine whether enough factors were present to make drivers employees.
In the Lyft case, the judge found that the factors were mixed, that a jury might decide the case either way, and for that reason, he could not dismiss the case on a motion.
Much is at stake, considering that employer status brings with it the obligation to pay minimum wages and overtime, reimburse drivers for all expenses (including automobile and cell phone use) and provide workers compensation insurance, and gives the company potential liability for any harm caused by drivers, whether in accidents or otherwise. Some customers of ridesharing programs have reported assaults by drivers.
While these cases focus on drivers, the results could determine how future technology innovation is implemented. The whole idea of "lead-sharing" apps is focused on the "community" aspect of technology use. That is, the company just gives people a platform to share something, but is largely uninvolved in how people use the service. Airbnb is a good example, where people with rooms and people who need rooms can find each other. But in the case of a company offering rides and providing drivers, the lines are a bit blurrier, and we'll have to wait and see as these cases wind their way through the courts.
Storrow can be reached at [email protected]
The drivers, who signed up to make themselves available on smartphone apps to give rides for a fee, complain that there are too many rules to call them independent contractors, despite the fact that they determine their own hours and locations and in most cases use their own cars. They claim that Uber sets prices, monitors performance, and terminates those who fail to meet standards. Lyft drivers claim the company exercises control in other ways, terminating those who fail to meet certain "acceptance" ratings from passengers and imposes "Lyft rules" for drivers to follow while driving.
Uber and Lyft claim they are technology companies, not transportation companies, and that what they provide drivers is a "lead generation service" along with brand marketing.
The federal judge in the Uber case ruled that the facts were not clear cut, but that Uber looks more like a transportation company than a mere technology company, and that a jury would be needed to determine whether enough factors were present to make drivers employees.
In the Lyft case, the judge found that the factors were mixed, that a jury might decide the case either way, and for that reason, he could not dismiss the case on a motion.
Much is at stake, considering that employer status brings with it the obligation to pay minimum wages and overtime, reimburse drivers for all expenses (including automobile and cell phone use) and provide workers compensation insurance, and gives the company potential liability for any harm caused by drivers, whether in accidents or otherwise. Some customers of ridesharing programs have reported assaults by drivers.
While these cases focus on drivers, the results could determine how future technology innovation is implemented. The whole idea of "lead-sharing" apps is focused on the "community" aspect of technology use. That is, the company just gives people a platform to share something, but is largely uninvolved in how people use the service. Airbnb is a good example, where people with rooms and people who need rooms can find each other. But in the case of a company offering rides and providing drivers, the lines are a bit blurrier, and we'll have to wait and see as these cases wind their way through the courts.
Storrow can be reached at [email protected]