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.

Advertisement

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.

"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. Redmi Note 17 Pro Max 5G India Launch Teased
  2. Samsung Galaxy S26 FE Will Go on Sale in India Soon, Microsites Confirm
  3. Philips 5G Smartphone Set to Launch in India on This Date
  4. Vivo T5 5G Key Specifications Confirmed Ahead of September 2 India Launch
  5. Apple Leadership Shakeup: Phil Schiller Gives Up App Store, Events Roles
  6. Vivo X500 Pro Max Camera Sample Revealed; Leak Reveals Huge Island
  7. Xiaomi UltraThin Magnetic Power Bank Set to Launch in India on This Date
  1. Sony Launches Live TV Service on PS5, Bringing Movies, TV Shows, Sports and More to PlayStation Console
  2. Oppo Teases Android 17-Based ColorOS 17 With Fresh Animations and UI Design
  3. Samsung Galaxy S27 Series Could See Major Camera Hardware Changes: Here's What You Need to Know
  4. Xiaomi UltraThin Magnetic Power Bank 5000 15W India Launch Date Revealed; Magnetic Power Bank 10000 45W to Tag Along
  5. Redmi Note 17 Pro Max 5G India Launch Teased
  6. OnePlus 16 to Launch With a Custom BOE Display, Notable Camera Upgrade, Tipster Claims
  7. Oppo Find X10 Key Specifications Leaked Ahead of Expected September Launch
  8. Samsung Galaxy Book 6 Launched With Up to Intel Core 5 Chip, Galaxy AI Features: Price, Specifications
  9. Poco X8 5G Visits Geekbench Website Ahead of September 4 India Launch
  10. Bitcoin Holds Near $79,200 as Japan Rate Hike Bets Raise Market Risks
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.