A US judge in Philadelphia has ruled that limousine drivers for Uber Technologies Inc. are independent contractors and not the company's employees under federal law, the first ruling of its kind on a crucial issue for the ride-hailing company.
US District Judge Michael Baylson, sitting in Philadelphia, rejected calls from drivers for UberBlack, the company's limo division, to be treated as employees with all of the perks that go with. In making their arguments, Uber portrayed the plaintiffs " as entrepreneurial business-owners who use UberBlack as a means of acquiring trip requests, with their primary competition coming from other Limousine-for-hire companies". "The undisputed facts in the record reflect that, while online, plaintiffs, inter alia, accepted rides from private clients, slept, did personal errands, smoked cigarettes, took personal phone calls, rejected trips because they were exhausted, and conducted business for their independent transportation companies".
The legal classification of workers has been a major issue for "gig economy" companies that rely on independent contractors.
According to a report from Bloomberg, one of the plaintiffs' lawyers, Jeremy Abay, said he would appeal the ruling to the Third U.S. Circuit Court of Appeals, in Philadelphia.
Matthew Hank of Littler Mendelson represented Uber.
"We are continuing to monitor the accounts that were affected - however, there has been no indication of fraud or misuse of information connected to this incident", the company said in a statement that it sent to Folha.
The Uber drivers involved in the suit also alleged that the firm violated its fiduciary duty to drivers by launching the cheaper UberX service. The issue about whether the drivers are employees or independent contractors emerged as a central issue in the litigation. Many Uber drivers have sued the company claiming that their work makes them Uber employees and entitled to pre-set minimum wages, overtime pay and insurance benefits. Florida ruled that Uber drivers aren't employees. "The court likens this situation to a carpenter, or a plumber, who is engaged to complete a renovation project for a homeowner".