Regulations

Suit Claims Uber Saves Huge Sum By Misclassifying Drivers

Posted on September 11, 2018
The new suit claims that Uber fails to pay drivers for breaks as required under California law and shirks tax obligations, including the 6.2% employer Social Security tax, the 1.45% employer Medicare tax, and unemployment insurance contributions. (Creative Commons photo)
The new suit claims that Uber fails to pay drivers for breaks as required under California law and shirks tax obligations, including the 6.2% employer Social Security tax, the 1.45% employer Medicare tax, and unemployment insurance contributions. (Creative Commons photo)

A new lawsuit against Uber Technologies Inc. claims the company may save more than half a billion dollars each year by misclassifying drivers in California as contractors rather than employees.

The lawsuit, brought on behalf of Studio City-based livery service Diva Limousine Ltd., claims Uber’s “below-cost and anticompetitive pricing” has taken its toll on a proposed class of pre-arranged transportation companies in California and others across the country who have affiliate relationships with them.

“Each day that Uber misclassifies its primary workforce, it steals wages from drivers earning below a living wage and gains millions of dollars in unlawful cost savings. Uber uses these savings to price its services far below their cost,” wrote the plaintiffs lawyers at Robins Kaplan and Keller Lenkner in Monday’s 27-page complaint. “Predatory pricing strategies have been a feature, not a bug, of Uber’s business model,” they wrote.

The Recorder/Law.com article here

Related Topics: California operators, employee vs independent contractor, labor laws, lawsuits, legal issues, TNCs, Uber

Comments ( 8 )
  • Chuck Cotton

     | about 3 days ago

    Uber has been a fraud since inception. WHY CAN'T THE LIVERY INDUSTRY GET IT, ESPECIALLY THE ATTORNEYS WHO SUE UBER. Uber has NO OPERATING AUTHORITY and operates unregulated in a regulated industry. The US CODE 49, sections 300-399, particularly 390.5 & 392.9a is the law. Uber is a car service and must comply to operate on the streets and highways of America. Taxicabs are exempt. Uber is clearly an employer and the driver is an employee. Uber CONTROLS all operations portal to portal including the app, the money, hiring/firing, scoring/rating systems, employee electronic handbooks and all operations. The vehicles used by Uber drivers are private and not commercial vehicles. Totally illegal in all fifty states to operate transporting passengers for compensation. THERE HAVE BEEN NO PUBLIC OR COURT CHALLENGES BY THE MEDIA OR ATTORNEYS OR REGULATORS. If such were presented to a Federal Judge, he would rule according to the above stated law and issue a cease and desist order to the USDOJ to take shutdown action.

  • See all comments
More Stories
The City of Chicago has implemented some of the strictest regulations in the industry that by all accounts was completely misguided despite repeated input from and meetings with members of the Illinois Limousine Association (ILA). (Creative Commons photo)
Article

Chicago Micromanages Party Buses

SEPT. LCT: Amid accidents, deaths, injuries, and skyrocketing insurance premiums, operators are chafing under a web of strict new rules.