Uber Probed by US Judge on Driver Benefits

Advertisement
By Reuters | Updated: 31 January 2015 16:29 IST
A US judge appeared skeptical on Friday about Uber's bid for a quick pretrial ruling that its drivers are contractors and not employees, a critical question facing Silicon Valley's sharing economy.

App-based ride service Uber, and smaller rival Lyft, face separate lawsuits seeking class action status in San Francisco federal court, brought on behalf of drivers who contend they are employees and entitled to reimbursement for expenses, including gas and vehicle maintenance. The drivers currently pay those costs themselves.

A ruling against either company could significantly raise their costs beyond the lawsuit's scope and force them to pay social security, workers' compensation and unemployment insurance. That could affect the valuations for other startups that rely on large networks of individuals to provide rides, clean houses and other services.

At a court hearing on Friday, U.S. District Judge Edward Chen said Uber's bid for a pretrial ruling its drivers are contractors is a "tough argument" to make, given that the drivers serve Uber's business goals.

Advertisement

"The idea that Uber is simply a software platform, a service provider and nothing else, I don't find that a very persuasive argument," Chen said.

Advertisement

Ultimately, a jury might have to decide the issue, he added.

The hearing came a day after a similar one involving Lyft. In that case, U.S. District Judge Vincent Chhabria said whether drivers are employees or contractors is "very difficult" to decide, but that California law appears to favor the drivers. Chhabria has not yet ruled.

Advertisement

Uber has raised more than $4 billion from prominent venture capital firms such as Benchmark and Google Ventures, valuing the company at $40 billion and making it the most valuable U.S. startup. Lyft has raised $331 million from Andreessen Horowitz, Founders Fund and other investors.

The drivers have not yet specified how much money they are seeking in damages.

Advertisement

Drivers argue they should be considered employees because Uber and Lyft can hire and fire them and require them to accept a certain percentage of rides, and to pass background checks.

Uber and Lyft counter that drivers control their own schedules, are not assigned a territory, and are not supplied with any equipment apart from an iPhone and a sign.

© Thomson Reuters 2015

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: Apps, Uber
Advertisement

Related Stories

Popular Mobile Brands
  1. OnePlus 15s Visits BIS Certification Website; Could Launch in India Soon
  2. Ethirneechal Thodargiradhu Now Streaming on SunNXT: What You Need to Know
  3. Google's Pixel Phones Get a Second December Update With These Fixes
  4. OnePlus 15R With 7,400mAh Battery, Snapdragon 8 Gen 5 Debuts at This Price
  5. OTT Releases of the Week: Thamma, Mrs Deshpande, Nayanam, and More
  6. Truecaller's Voicemail Feature Is Now Free for Android Users in India
  7. OnePlus 15R Review
  8. Xiaomi 17 Ultra With Leica-Tuned Cameras Confirmed to Launch Soon
  9. OnePlus Watch Lite With Up to 10 Days Battery Life Launched: See Price
  10. Battlefield 6 Is Beating Black Ops 7 in the Race for 2025's Top-Selling Game
  1. Call of Duty: Black Ops 7 Was the Best-Selling Game in the US in November, but Trails Battlefield 6 in 2025
  2. Truecaller Voicemail Feature Launched for Android Users in India With Transcription in 12 Regional Languages
  3. OpenAI Starts Reviewing Third-Party App Submissions for ChatGPT Integration
  4. Google Brings Opal, an AI-Powered Mini App Builder Tool to Gemini
  5. Redmi Pad 2 Pro 5G India Launch Teased Soon After Global Debut: Expected Specifications, Features
  6. CES 2026: Samsung to Unveil Bespoke AI Laundry Combo, Jet Bot Steam Ultra Robot Vacuum, and More
  7. Samsung Exynos 2600 Details Leak Ahead of Galaxy S26 Launch; Could Be Equipped With 10-Core CPU, AMD GPU
  8. Vivo Y50e 5G, Vivo Y50s 5G Appear on Google Play Console; Mysterious Vivo Phone Listed on Certification Site
  9. Nvidia to Reportedly Cut GeForce RTX 50 Series GPU Production Amid Global RAM Shortage
  10. Apple Allows Third-Party App Stores, Relaxes Payment Restrictions in Japan to Comply With MSCA Act
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.