US judge grants class-action status to suit by Uber drivers

A suit filed by Uber drivers has been granted class-action status after a US federal judge ruled that the suit filed in Northern California by several Uber drivers also covered UberBlack, UberX and UberSUV drivers dating back to August 2009.

Uber drivers, contend they are treated like employees but paid as contractors.

US district court judge Edward Chen found that the drivers' relationship with the company was similar enough for them to be represented as a class in the case.

The suit filed against Uber Technologies argues that drivers qualified as Uber employees as opposed to independent contractors and, as such, were deserving of benefits and protections called for by California labour law.

Particularly, those who moved court contend that Uber had failed to reimburse drivers for expenses or losses related to doing their jobs, and had failed to pass on tips from riders.

Uber derives part of its appeal from the fact that people summon rides and pay using smartphone applications, with transactions going through Uber and no cash required to be paid. Uber passenges are not required to pay tips.

"While we are not surprised by this court's ruling, we are pleased that it has decided to certify only a tiny fraction of the class that the plaintiffs were seeking," an Uber spokesperson said.

"That said, we'll most likely appeal the decision as partners use Uber on their own terms, and there really is no typical driver - the key question at issue."

According to commentators, the ruling had set the stage for a high-profile legal battle which could have sweeping implications for Uber's business model.

The model inspired dozens of startups whose future fortunes relied on independent contractors to deliver food, run errands and clean houses.

Millions of US citizens are moving over to more flexible work arrangements that allow them to set their own schedules and hold multiple part-time occupations.

Uber had raised billions of dollars from investors at a valuation that had shot to $51 billion on the premise that its operations were based on a technology platform connecting drivers and passengers, rather than a taxi service that owned cars and employed drivers.

If the class-action suit were to succeed, Uber would be forced to pay drivers for health insurance, workers' compensation and work expenses such as tolls, fuel and car repairs.

Last month Uber Technologies Inc closed a new round of funding that valued the online taxi-hailing company at nearly $51 billion, according to The Wall Street Journal, which cited people familiar with the matter. (See: Uber Technologies valued at nearly $51 bn after new funding).