Uber, Lyft swept up in drivers' lawsuits challenging contractor status

Drivers for Uber and Lyft work as contractors, and as such they're left to deal with certain expenses themselves: gas, maintaining their vehicles, and more. New lawsuits hoping to get class-action status in California are looking to change that, contending that the services' drivers are employees and should be reimbursed for those aforementioned expenses. Uber sought a pretrial ruling that'll peg the drivers on its system as contractors, but didn't ultimately get what it wants, and the issue will be going before a jury.

The companies are facing separate lawsuits over the same issue, which would have drivers viewed as employees rather than contractors — a designation that will come with many perks not available presently. Such a ruling would be a big burden to the companies, however, which would end up shelling out considerably more financially than it currently does. In addition, such a ruling would have a ripple effect on other contractor-based services.

Uber wants the lawsuit to go away quickly, but a US District judge waved off the pretrial request, saying that the whole drivers-are-contractors is a "tough argument", particularly because Uber's business is dependent on the drivers. That Uber is nothing more than "a software platform" isn't clear cut.

A similar statement was made in the Lyft case, with the US District judge overseeing it saying that it is "very difficult" to determine whether the drivers are contractors or employees...and that in California, at least, the laws could be in favor of employee designations.

The issue is murky, not the least of which is because of the combination of requirements and freedoms that drivers have — there are background checks, the ability to be fired, and the requirement to take on a designated percentage of rides, for example. At the same time, drivers can work (relatively) where they want when they want, and they're doing so with their own vehicles.

SOURCE: Reuters