Houston-area drivers sue Uber over employment status

Houston-area drivers sue Uber over employment status

Employee vs. contractor status at issue in federal class-action filing

by Dug Begley

Lawyers for 19 Texas drivers for Uber on Friday filed a federal class-action lawsuit in Houston, claiming the ride-hailing app company’s oversight and control of supposedly independent drivers is so pervasive, they should be considered employees.

If successful, the lawsuit could mean the thousands of local drivers for the company suddenly would be Uber workers instead of independent contractors, upending what some have considered an innovative business model and others have called modern-day servitude.

“The primary issue is, are these guys employees or independent contractors,” Houston lawyer Kevin Michaels said. “Uber tracks every move that a driver makes. As long as they are on the app, they are under Uber’s control.”

Uber officials Friday afternoon did not respond to multiple requests for comment.

Lawyers said in the filing to the U.S. District Court for the Southern Division of Texas, the drivers made less than minimum wage when their time awaiting fares is calculated, despite the company’s claims in promotional materials that drivers could earn $100,000a year.

“Given the current fare structures, an individual would have to drive an exorbitant number of hours on a daily, weekly and monthly basis to even approach gross fares totaling this amount, much less earn this amount,” the lawyers wrote. “Uber knew such statements were fraudulent and misleading and also knew that individuals would rely on such misrepresentations when deciding to become Uber drivers.”

The drivers are mostly from the Houston area, but some are from Austin and Dallas, according to Michaels. Each of the drivers opted out of an agreement to use arbitration to address any concerns, he said. Michaels said he has approximately 240 other drivers who are covered by the arbitration agreement, with their own pending concerns. The arbitration clause is important because drivers who agree to it cannot take their claims to federal court as easily.

The lawsuit filed Friday makes claims similar to those in various courts across the nation. A number of cases in California, Illinois, Massachusetts and other states already have drawn wide attention that could put the question on a path to the U.S. Supreme Court, should various circuit courts rule in different ways.

“It is definitely going to be years,” said Wilma B. Liebman, former chairwoman of the National Labor Relations Board.

Second lawsuit filed

It is the second lawsuit filed on behalf of drivers by Michaels. The first, filed by three drivers, prompted Friday’s filing, which adds claims that drivers should be considered employees under the Fair Labor Standards Act of 1938.

The act is the federal law that sets requirements for overtime pay, a federal minimum wage and record-keeping on the part of employers to document fair pay.

While the company long has claimed it is a technology firm and links independent drivers and interested riders, its oversight of drivers is significant. Drivers who do not make themselves available by turning on the app frequently can be deactivated from the system, along with drivers who cancel too many trips.

While the smartphone app is active, it can track drivers’ movements intricately and even relay information if a driver is braking too abruptly or speeding.

Though some have called the app’s tracking ability another layer of safety, many local drivers – most of whom are unwilling to speak publicly – have said it worries them. Drivers also have complained the company’s share of all trips, which in some cases is 28 percent of the fare plus a $1 safety fee, leaves them after expenses with a pittance.

To make ends meet, some drivers are active and soliciting rides for 12 hours or more a day. Michaels said if they are engaged in doing work, under the control of Uber, they deserve compensation.

The lawsuit asks that drivers be considered employees and paid back for overtime they have accrued, as well as standing as employees with full benefits common with employment. Michaels said for each driver, the back pay for overtime would be in the thousands of dollars.

Varied results so far

Thus far, challenges across the country to Uber’s use of contractors have yielded varied results. Drivers in California were deemed employees by the state, though federal judges wavered, pausing a number of lawsuits until the arbitration issue is resolved. In New York, Uber bargained with drivers who formed the Independent Drivers Guild, which communicates with the company on rates and conditions.

“They are giving the workers a little bit of a voice,” Liebman said.

Liebman said the various approaches have not finalized anything, and many of the lawsuits face years of defense from Uber and turn on complex legal questions, especially the arbitration issue.

“I think there are huge obstacles, and I really don’t know in the end how it is going to be resolved,” Liebman said.

Dug Begley is the transportation writer for the Houston Chronicle.

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