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Judges back drivers in lawsuits against Uber, others

SAN FRANCISCO — Uber Technologies Inc. and Lyft Inc. lost an early round of a fight with drivers who want to be treated as employees rather than independent contractors in lawsuits that could upend the companies’ nationwide business models.

The on-demand car services will need to make the case to juries why they shouldn’t offer their drivers minimum wage, reimbursement for expenses, and other benefits, according to rulings by two judges in separate cases in San Francisco federal court. Both judges voiced skepticism in January when the companies made their case for the contractor classification.

Uber and Lyft use a model throughout the United States that provides drivers with mobile phone applications to pick up riders.


“Because the numerous factors for deciding whether a worker is an employee or an independent contractor point in decidedly different directions, a reasonable jury could go either way,” US District Judge Vince Chhabria wrote in Wednesday’s ruling in the Lyft case. “Accordingly, there must be a trial.”

Lawsuits against Uber, Lyft, and other car-booking companies have mounted as they seek to crack open the US taxi and limousine market, estimated by IbisWorld Research to be an $11 billion industry. Uber, founded in 2009, is the most highly valued US technology startup. The company raised $1.2 billion in December at a valuation of $40 billion.

The cases against Uber and Lyft, which are both based in San Francisco, were brought on behalf of drivers nationwide, although judges have narrowed them to include only California drivers.

The drivers allege violations of California labor and gratuities laws, and their lawyers have asked a federal Appeals Court to review rulings limiting the cases to only drivers in that state.

Chelsea Wilson, a spokeswoman for Lyft, declined to comment on the ruling. An Uber representative wasn’t immediately available for comment.