Lawsuit Claims Uber Drivers Misclassified as Independent Contractors, Denied Minimum Wage [UPDATE]
by Erin Shaak
Last Updated on September 17, 2021
Short v. Uber Technologies, Inc.
Filed: February 3, 2021 ◆§ 2:21-cv-14057
A lawsuit challenges Uber’s apparent policy of misclassifying its drivers as independent contractors when they should more properly be classified as employees.
September 17, 2021 – Lawsuit Sent to Arbitration
The case detailed on this page was sent to arbitration after a judge found that Uber drivers do not fall under the Federal Arbitration Act’s exemption for transportation workers engaged in interstate commerce.
According to a September 14 order, Uber’s terms and conditions (to which drivers must agree before they can use the Uber platform) contain an arbitration provision that stipulates that any labor disputes must be resolved through individual arbitration.
While the plaintiffs argued that they and the drivers they seek to represent fall under an exemption to the FAA, a law that governs the validity of arbitration agreements, for workers “engaged in foreign or interstate commerce,” U.S. District Judge Aileen M. Cannon found that that was not the case.
Judge Cannon noted that when deciding whether the transportation worker exemption applies, other courts have considered not whether an individual worker has engaged in interstate commerce but whether “the class of workers” to which the individual belongs has done so.
According to court documents, Uber has pointed out that only about 12.8 percent of its drivers made interstate trips in 2020 and for those who did, interstate trips accounted for only two percent of their trips.
Thus, the plaintiffs are not covered by the FAA’s transportation worker exemption and are subject to the arbitration provision in Uber’s terms and conditions, Judge Cannon ruled.
The lawsuit has been stayed and administratively closed pending the results of the arbitration proceedings.
A proposed collective and class action challenges Uber Technologies, Inc.’s apparent policy of “willfully misclassifying” its drivers as independent contractors when they should more properly be classified as employees.
According to the suit, the nature of the business relationship between Uber and its drivers reflects that of an employer and employee. The case claims Uber has unlawfully denied drivers the protections afforded to employees under federal and state labor laws, including receiving at least the minimum wage for every hour worked, by misclassifying them as independent contractors.
“In an effort to avoid providing its drivers with the minimum benefits and protections afforded employees under the [Fair Labor Standards Act] and Florida law, Uber has willfully, uniformly, and unilaterally classified each and every one of its drivers as independent contractors, rather than employees, despite the fact that the factual circumstances of the relationship between Uber and its drivers clearly demonstrate that Uber drivers are in fact employees of the company,” the complaint states.
Per the case, Uber drivers are subject to the ride-hailing company’s policies, rules and regulations. The suit argues that drivers should be classified as employees for the following reasons:
- Uber retains the right to control the manner and means by which drivers accomplish their work;
- Uber retains the right to hire and fire workers at its sole discretion and block drivers from being able to use the Uber platform;
- Uber collects a 20-percent “administrative fee” from tips left by customers for drivers;
- Uber drivers do not engage in business “distinct from that of Uber”;
- Drivers are required to place “a large pink mustache” on their car while transporting a rider to identify it as an Uber vehicle;
- Uber controls drivers’ pay rates;
- Uber requires that drivers consent to receive emails and texts from the company;
- Drivers are required to accept discounts and promotions offered to customers;
- Drivers are required to complete a two-hour training session;
- Uber sets standards for cleanliness and appearance of drivers’ vehicles;
- Drivers are limited in how far they can drive a customer;
- Uber advertises that drivers receive an hourly pay rate;
- Drivers are limited from earning other income because of restrictions on when they can work for Uber;
- Drivers are prohibited from hiring other employees to assist them; and
- Drivers are required to respond to and accept all customer ride requests unless they are transporting a customer at the time.
The case claims Uber drivers do not receive the minimum wage for each hour worked and are instead paid using a formula determined by Uber. According to the suit, the defendant’s apparent misclassification of drivers as independent contractors has led to the workers being deprived of pay for every hour worked and paid less than the full minimum wage as required by federal and state law.
The suit looks to represent anyone who worked for Uber as a driver anytime since June 18, 2012, and anyone who worked for Uber as a driver in Florida within the past four years and until judgment is entered in the case.
Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.
Before commenting, please review our comment policy.