Uber loses initial court battle, California class-action incoming

The name Uber is seemingly everywhere. Whether the company is battling taxi drivers in Canada, receiving boat-loads of investment cash from tech giants, or trying to spend its own money to acquire other services to bolster app capabilities, the company makes the news a lot. The convenience of calling a car at nearly 50% of the cost of a traditional taxi is alluring, but drivers aren't so pleased.

Earlier this summer, three Uber drivers, known as "Partners", filed a lawsuit against the company within the state of California that would enable as many as 160,000 drivers to take part in a class-action lawsuit. The reason for the suit? Direct employment by the company.

As it stands, a driver must work as an independent contractor and pay out-of-pocket for everyday expenses. Gas, oil changes, important preventative maintenance, and other expenses are incurred by the driver without any reimbursement from Uber. On top of that, Uber takes 20% of each fare a rider pays and doesn't allow tipping within the app and has the ability to set fare rates and hire/fire as the company pleases. These control issues are what drivers in California are aiming to address and change for the better.

Should the class-action lawsuit rule in favor of drivers, new employment statuses could come as a result with significantly better benefits. This would force Uber to rearrange its investment priorities as the company is currently sinking millions into self-driving car technology that would certainly put many/all drivers out of a job in the future.

If California courts rule in favor of Uber partners, it would seem likely that partners in other states would push for class-action lawsuits as well. Perhaps the company should strike a settlement before things get out of hand?

Source: Wall Street Journal

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