I posted recently about a lawsuit involving Uber and independent contractors.  Well, it’s happened again.  The company was hit with a proposed class action suit in Pennsylvania state court with a central allegation being the drivers’ claim that they were misclassified as independent contractors.  The case is entitled DiNofa v. Uber Technologies Inc. et al., and was filed in the Court of Common Pleas of Philadelphia County.

Copyright: eevl / 123RF Stock Photo
Copyright: eevl / 123RF Stock Photo

The complaint alleges that the misclassification caused drivers to be undercompensated and not reimbursed for expenses.  The named plaintiff alleged an employer-employee relationship existed and that the Company “exerts significant control over its drivers.”   This control was evidenced by the training given on how to deal with customers, the unilateral setting of fares and requiring that drivers maintain a rating from riders of 4.5 out of five possible stars.  The Complaint alleges that “if a driver fails to maintain an average customer rating of 4.5, Uber will deactivate his or her ability to use the application to pick up customers, an action tantamount to terminating the driver ‘at will,’ a hallmark of an employee-employer relationship.”

Uber is currently facing two class actions in California federal court over the classification issue under the Fair Labor Standards Act.  The drivers there were certified as a class when the Judge found a tension between the Company’s defense that there were properly classified as independent contractors with the defense that the drivers’ experiences with Uber were too disparate to allow certification.

The Company contends that the drivers are in their own businesses and 87% of them drive because they “they love being their own boss.”  The Company maintains that if they were employees, they would be paid hourly, drive assigned shifts and lose the flexibility that they cherish.  Thus, these people are independent contractors because they are not controlled and they are in an independently established business.

The Takeaway

The number of lawsuits facing Uber is a “sign of the times.”  Given the new USDOL initiative seeking to be overly inclusive on the “employee” side, it is getting (and has gotten) very difficult to maintain and sustain true, actual independent contractor or “consultant” type arrangements.

On this case, I do believe these folks are in their own businesses, which is a crucial necessity for a showing of independent contractor status, under any statute in any jurisdiction.  The seeming control elements bother me, however, unless a business related or, better, customer relations reason for exercising this ostensible control exists.