Court Ruling: Independent Contractor Model Not So Uber

 

Today's ruling is a major setback for Uber’s contractor model. While the court agreed with Uber’s argument that drivers set their own schedules, the court weighed more heavily the fact that Uber controls drivers’ territories, unilaterally sets their compensation, restricts their ability to work independently for rivals such as Lyft and Sidecar, promulgates performance standards for drivers, requires an onboarding process for them, and allows Uber to terminate drivers without cause.  Key to note, according to the court, while Uber drivers believed that they were independent contractors, they came to this belief because Uber told them so. Under California law, what an individual believes about his or her work relationship to a parent organization does not negate the economic realities of work control exercised by the organization.  Uber, in effect, cannot hoodwink drivers into waiving their right to an employment relationship. This clears the way for anyone who drove for Uber in California since August 16, 2009 to join the plaintiff class. That group is likely to be very large, and the ruling today will exert pressure on Uber to settle short of facing large damages at trial—and worse, an adverse legal precedent for other courts. Uber’s work model has faced legal setbacks abroad; but this large setback, before a court in Uber’s home state and city, may undermine its chic appeal for signing up drivers who are looking for the Uber lifestyle. Court ruling is here: https://www.documentcloud.org/documents/2325473-gov-uscourts-cand-269290-341-0.html