Uber drivers in California were recently granted class action status, opening the company to a much larger pool of potential plaintiffs and calling into question the business model used by Uber and many other companies that rely on using independent contractors.
“It permits the company to avoid the payment of payroll taxes, benefits, unemployment benefits and workers’ compensation insurance. It dramatically reduces the overhead associated with the workforce,” said Jim Evans, partner in Alston & Bird’s Labor and Employment Group.
Evans has tried similar cases involving taxi companies and is not surprised that class action was certified because he says the Northern District of California tends to be a “pro-certification” venue. He also agreed that it is most efficient to try the claims collectively because drivers would typically have common contracts.
But when asked how a jury will characterize the drivers, Evans says his money is on Uber.
“I think these drivers have a tremendous amount of independence in deciding when to work or not, whether or not they will accept a ride, when to take their lunch break, or if they want to take a nap in the middle of the day. That doesn’t look like an employment relationship to me because the driver is getting to decide how, when and where he works.”