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Jul
2014
9

Uber Hit With Misclassification Lawsuit in MA, Rallying Cry for Driver Protections Amplifies

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Uber Technologies Inc., the wildly popular new alternative taxi service, will be facing a lawsuit in Massachusetts where some of it’s “partners” (the term the company uses to describe its drivers) believe they are being misclassified as independent contractors.  The San Francisco-based company, which claims to generate “20,000 new driver jobs” worldwide each month, currently operates in 38 countries and 77 American cities.  The lawsuit has been filed on behalf of Uber driver Hakan Yucesory of Brookline, MA but will seek class action status, according to the Boston Glove:

The suit filed Thursday in Suffolk County Superior Court in Boston by Shannon Liss-Riordan, who has won major labor lawsuits representing Starbucks baristas, house cleaners, skycaps, and exotic dancers, accuses Uber of misclassifying its drivers as independent contractors to avoid paying them the same as employees with benefits.

The suit also accuses Uber of not giving drivers all the money they receive in gratuities from riders, that the company “retains a portion of the gratuity for itself.” That alleged conduct violates the Massachusetts tips law, said Liss-Riordan.

“By not classifying its drivers as employees, Uber is shifting the expenses of running a business to its workers,” Liss-Riordan said. “Making the workers pay for these business expenses saves Uber an enormous amount of money.”

Also at the heart of the lawsuit is the business model of acting as a middleman between customers and service providers.  Liss-Riordan argues, however, that Uber is actually a transportation company and its partners are employees.

“It’s these so-called new technology companies that are using old-school methods to keep their workers from having their rights under the law,” she explained to the Globe. “It’s the newest spin to avoid employee classification.”

The use of the term “partners” screams of the linguistic dressing-up of Walmart, which refers to even its most low-level employees as “associates.”

Denise Cheng, a research assistant at the MIT Center for Civic Media, has studied the emerging peer-to-peer economy.  She argues that states must develop new labor laws that can be applicable to the emerging economy that features neither traditional employees nor traditional independent contractors.  

“If their drivers are classified as employees then that suddenly makes their business model untenable.

There needs to be a third classification that eases the transition between being a freelancer and being an employee.”

In Chicago, a bill addressing how to treat drivers at companies like Uber could become a sticking point for the company’s desire to expand there. While not a misclassification question per se, the bill does attempt to provide some support, in the form of hours minimums for these unprotected workers:

The key point of the dispute, which is occurring to some degree all over the country, is whether to treat Uber drivers using their own vehicles the same as conventional taxi drivers in leased cabs.

The proposed state law specifically would require Uber drivers to get a chauffeur’s license if they’re on the clock at least 18 hours a week. The city ordinance would require an “average” of more than 18 hours for a company’s entire driving staff.

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