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Case to Watch: Uber Drivers granted Class Action Status by Federal Court in San Francisco

Written by Zana Tomich on September 2, 2015 Category: Business Law & Transactions
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Yesterday, the U.S. District Court in San Francisco certified a class of drivers in O’Connor, et al v. Uber Technologies, Inc., allowing them to continue on with their suit against Uber, the ride sharing service that has revolutionized the industry.

In today's “sharing economy” where businesses have taken shared access to products or services, and the freelance business model to new heights, the outcome of the case can have far reaching implications. Companies like Uber and Air B&B have grown exponentially in the past few years, with Uber being valued by some at $50 billion.

The recent case, which is at the beginning stages, addresses the issue of whether the drivers have been misclassified as independent contractors versus employees. If the drivers were indeed misclassified, and deemed employees, they could potentially be entitled to back pay, benefits, and reimbursable expenses.

The outcome of this case could mean a shift in the way the business model works, and broader implications on how the “sharing economy” businesses are structured and their profit margins. Moreover, it could impact the flexibility of the contractors in this new economy. In many cases, the contractors, or in this case drivers, prefer the flexibility of being an independent contractor allowing them to work hours they choose, multiple part time jobs, or in project based fields.

This case could take years to resolve, but how the court classifies these workers could extend well beyond the ride sharing service, and definitely makes it a case to watch.

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