Uber faces fresh legal attack for refusing to treat drivers as employees

A lawyer who's been fighting the ride-hailing giant in court for six years wants a judge to now take into account the extra costs saddled on California taxpayers by Uber's business model.

Uber Technologies Inc. faces a new legal attack on its refusal to treat drivers as employees that depicts the company as mistreating not just them but the public at large.

A lawyer who’s been fighting the ride-hailing giant in court for six years wants a judge to now take into account the extra costs saddled on California taxpayers by Uber’s business model.

Drivers being cheated out of wages and not being reimbursed for expenses causes California to lose out on payroll taxes, attorney Shannon Liss-Riordan said in an interview. Uber also avoids paying premiums for workers compensation, social security, unemployment and disability insurance, and public assistance for drivers who can’t support themselves, she said.

The company has warned that attempts to convert its drivers from independent contractors to employees under California’s recently passed AB 5 law, which goes into effect Jan. 1, will be handled as they always have: by its armies of lawyers in courtroom combat. For good measure, Uber is pouring tens of millions of dollars into a 2020 ballot initiative in an attempt to shield its drivers from the law.

Uber says the driver Liss-Riordan is representing, Thomas Colopy, can’t show its labor model causes him “irreparable harm.” His request for the company to be forced to reclassify drivers “does not serve the public interest, but rather only his own,” Uber said in a court filing.

The case was argued Thursday before US District Judge Edward Chen, who handled one of their previous battles that ended in a $20 million settlement without any change to the company’s business model.

Chen said it’d be “highly unusual” to issue an immediate order, or injunction, requiring Uber to reclassify its drivers before first deciding whether to let the lawsuit proceed as a class action. The judge suggested the case might stand a better chance in state court.

“I’ll take a second look at it but I’m quite skeptical,” Chen said. But he told Uber he’s not throwing out the case at this point.

Business Standard