Uber is currently facing four different types of lawsuits in California:
- Personal Injury Claims: These involve car accidents caused by Uber drivers, where the injured parties are seeking compensation.
- Sexual Assault Allegations: Passengers have accused Uber drivers of sexual assault, leading to legal actions against the company.
- Misclassification Lawsuits: Uber is accused of misclassifying its drivers, with claims that the company owes back wages and civil penalties.
- Class Actions: These are related to the misclassification of drivers as independent contractors, a contentious issue impacting many drivers.
Personal Injury Claims
Uber is constantly dealing with personal injury claims related to car accidents caused by its drivers. These rideshare car accident lawsuits demand that Uber compensate the victims of those crashes. They begin by filing a claim against the driver’s insurance or Uber’s auto insurance company.
They can escalate if a fair offer is not made or if coverage is denied. Because Uber can still classify its drivers as independent contractors rather than as employees, Uber cannot be held vicariously liable for these accidents. Whether that classification is lawful or not is the subject of other lawsuits that Uber is facing.
Sexual Assault Allegations
Uber and other ridesharing companies, like Lyft, are being sued in California for sexual assaults committed by their drivers. These lawsuits claim that Uber should be liable for the assaults because it negligently hired dangerous drivers. Uber’s driver screening process involves a background check conducted by a third party, which is less expensive and faster than the FBI law enforcement background checks using fingerprints and the Live Scan system.
This allows Uber to save money and get drivers on the road more quickly but does not vet them as well. To make matters worse, Uber has marketed itself as a safe alternative to drunk driving. Many riders have used it for this purpose, putting intoxicated female passengers in danger of sexual assault.
Misclassification Lawsuits
Many Uber drivers are suing the company for worker misclassification on their own. These claims allege that they are actually employees, not independent contractors, and demand back wages and other benefits they should have received if correctly classified.
These include three other lawsuits alleging violations based on this misclassification:
- Claims brought by several cities and the state of California alleging that the misclassification violates California’s Unfair Competition Laws.
- Claims brought by the Labor Commissioner’s Office at the California Department of Industrial Relations for wage theft.
- Claims brought by UberEats driver Erik Adolph for California labor law violations under the Private Attorney General Act (PAGA).
Under California state law, worker classification is based on the ABC test. Workers such as Uber’s drivers are presumed to be employees. Uber can overcome that presumption by showing that:
- both under contract and in practice, the worker is free from Uber’s control and direction regarding the performance of the work,
- the work is outside the usual course of Uber’s business, and
- the worker is customarily engaged in an independently-established occupation of the same nature as the work being performed.
Uber has claimed that it is not a transportation company but a software company connecting people who want a lift to those willing to give one. Uber uses this argument to justify classifying its drivers as independent contractors. Under state employment law, as independent contractors, Uber or Lyft drivers are entitled to fewer workplace protections, such as reimbursement for work-related expenses, like gas, or the minimum wage.
Class Actions
California Uber drivers filed a class action against Uber for misclassification in 2014, which settled in 2019 for $20 million. However, Uber did not admit to misclassification under the terms of the class action settlement and continues to deny it. Another class action for misclassification settled on July 21, 2022, for $8.4 million.
To be eligible for a portion of the settlement in either class action, you must have validly opted out of Uber’s arbitration clause, or Uber must have no record of your acceptance of the arbitration agreement. The settlements cover Uber drivers who worked between August 16, 2009, and December 16, 2020, or UberEats workers who worked between June 28, 2016, and October 7, 2021.
An employment lawyer can help you file a claim for compensation against the settlement.
Timeline of misclassification claims
Uber’s misclassification lawsuits are a constantly evolving issue. Some of the most important events are:
- March 2019: The first misclassification class action lawsuit against Uber settles. Uber paid $20 million but denied wrongdoing and continued to classify its drivers as independent contractors.
- September 2019: The California Legislature passes Assembly Bill 5, adopting the ABC test for classifying employees and independent contractors.
- September 2020: The California Legislature passes Assembly Bill 2257, carving out new exceptions to Assembly Bill 5.
- November 2020: California voters pass Proposition 22, allowing app-based ridesharing and delivery companies like Uber to classify their drivers and delivery workers as independent contractors. However, companies must provide additional workplace protections, including workers’ compensation for injuries sustained on the job.
- August 2021: Proposition 22 is declared unconstitutional by a Superior Court judge, as it infringes on the Legislature’s exclusive ability to create and govern the workers’ compensation system.
- July 21, 2022: The second class action for misclassification settles for $8.4 million. As part of the settlement, Uber denies wrongdoing.
- March 2023: The California Courts of Appeal overturn the Superior Court’s ruling. However, the court also ruled that certain portions of Proposition 22 were unconstitutional but could be severed from the law.
- June 2023: The California Supreme Court announces that it will hear the case. The ruling is likely to come in 2024 or 2025.
- July 17, 2023: The California Supreme Court allows the PAGA claims against Uber to advance. Uber’s lawyer, Theane Evangelis, vowed to appeal, claiming that it contradicted an earlier U.S. Supreme Court case, Viking River Cruises, Inc. v. Moriana.
- September 28, 2023: The California Courts of Appeal allow the Unfair Trade Practices claim against Uber to move forward. Uber had argued that the California Attorney General and the Division of Labor Standards Enforcement (DLSE) were bound by the arbitration agreements its drivers had signed, but the court disagreed.
