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While some people drive for companies like Uber and Lyft as a side job to earn a little extra income, many make driving for these companies their full-time job. Because they depend on the income they generate in this economy, Uber drivers have stated that their pay is inadequate. In fact, some drivers want to be reclassified as employees, which has led to the Uber driver wages lawsuit.
How Being a Uber Driver Works
It is quite easy to be a driver with Uber, which is one reason it has become a popular option to earn income for those who cannot find other jobs or anyone who needs a second income. The minimum requirements to be a Uber driver include:
- Be of the minimum age to drive in the local city
- Have a minimum of one year of driving experience in the US or three years if under the age of 23
- Have a valid US driver’s license
- Own or have access to a four-door vehicle
The driver must have specific documentation, including their driver’s license and proof of vehicle insurance. They must also show proof of residency and have a profile photo that includes a full view of their face and top of shoulders to work with the business.
Once the person has submitted the required documents, they will go through an online screening process for their driving record and to check their criminal history. Once they have been approved, they can log into the app and start finding riders. For those who do not have a vehicle of their own, they can rent a car through Uber at a reduced rate.
The main benefits touted by these companies to entice people to sign up as drivers are flexibility and the ability to earn as much money as you want. Drivers can work whenever they choose and as often as they want. This supposedly translates into making as much money as they need or want.
Pay as a Uber Driver
How much you earn as a driver depends on several factors and may be less than what you expect. Uber and other ride-share companies take a percentage of the earnings, which leaves you the rest. The cost or fee per ride can vary based on time of day. During times of high demand such as late at night or after special events, the companies often charge a higher rate. This is the time of day when drivers will earn more.
Drivers must also know where to go to find riders as well as the right times of day when more rides are reserved. Those with limited time to drive will find they earn less. It also depends on where the person is driving. In a city like New York City where more people walk or ride, drivers can find a larger consumer base for those who order a ride on a consistent basis.
One must account for the cost of driving to cover and to determine the true amount of earnings. Gas and maintenance reduce the amount of profit a person makes. Also, if the driver must rent a vehicle, their amount of income after expenses will be lower. In many cities, the rate of pay per hour may end up being less than minimum wage, which has led some people to fight for higher rates from these companies, which has largely been ignored in the ride sharing market.
Independent Contractor vs. Employee
While pay is at the heart of the controversy of drivers against ride-sharing companies, the focus is often on whether the person can be classified as an independent contractor or if they are employees. If the person is an employee, they are eligible for minimum wage pay as well as health insurance and other benefits. They also only pay part of the taxes for the money they earn while the employer pays the rest.
An independent contractor doesn’t have the same protections or power. They do not have a minimum wage and are not eligible for company benefits. They also must pay the self-employment tax out of their earnings and they do not receive overtime.
The line between independent contractor and employee can often be blurred. However, there are laws and standards that determine which classification is applicable. In these lawsuits, the argument held is that Uber should reclassify its drivers to reflect their true status.
The issue with determining classification is that it isn’t black and white. Multiple factors go into determining whether a person is an employee or works on their own as an independent contractor. It’s not one single factor but a review of the entire relationship. For example, just because someone works 40 hours for a company, it doesn’t mean they should automatically be called an employee.
Part of the determination is in how much control the company has over when and where the person works and how they do their job. Uber is fighting the classification of employee because it says it does not require drivers to work certain hours or pick up a certain number of passengers. However, the drivers claim that Uber is guilty of misclassifying to get out of paying benefits that would otherwise be their rights as employees.
In 2018, Uber won a case in district court in Philadelphia that was filed in January 2016 which said that Uber drivers were not employees. However an appeal is in place which would take the case to federal court as the plaintiffs pursue an overturning of the decision.
New York City Requirements for Uber Pay
New York City is one place that has made changes for male and female Uber drivers. It is now required that Uber pays its drivers the equivalent of minimum wage in the city. The New York City Council also voted to classify drivers as employees and will prohibit new hires for one year.
Uber and Lyft have decided to strike back on what they deem to be unfair requirements. Uber filed a lawsuit against the city to block the new rules, saying that these measures will not address the issue of congestion on the streets or improve safety.
Lawsuits Against Uber
Uber and other ride-sharing companies have been involved in numerous battles and lawsuits regarding pay and benefits from New York City to San Francisco. In one case, O’Connor et al vs. Uber, a class action suit against the company is calling for the drivers to be relabeled as employees. Uber is fighting the litigation, saying that many drivers prefer the flexibility of being an independent contractor. A ruling has not yet been made.
Drivers have initiated strikes in the past to get the attention of ride-hailing companies. Their complaint is of unfair labor practices in regards to the terms of pay. The problem is that most of these strikes were local and didn’t get noticed. However, there is a growing trend of dissatisfaction with the pay practices of Uber and other companies that is bringing more drivers together. They have even created groups on Facebook to network and to help bring awareness to drivers around the country.
Drivers in Los Angeles have staged strikes in the past and one in March 2019 to complain about the cut in rates made recently by Uber. They signed on with the agreement to a certain rate per mile, and it was reduced afterwards with no input in the decision. When they complained, the company issued a statement in September of 2018 announcing plans to make improvements, but they weren’t enough to meet the demands of drivers.
Uber has been involved in other lawsuits regarding unfair pay. Thousands of drivers in California and Massachusetts were awarded class action status in 2016 with multiple plaintiffs from the two states. Uber agreed to pay $100 million in a deal to settle the case. However, the company has now offered to pay $20 million in reimbursement because it says the majority of the claimants were required to go through arbitration to settle the disputes and were not able to file lawsuits. An appeals court judge upheld the mandatory arbitration. Individual arbitration was deemed to be appropriate for these issues rather than initiating a lawsuit in court. The settlement is for men and women drivers who were hired from August 2009 to February of 2019.
An Illinois class action lawsuit was also filed against Uber, which alleged that a driver injured while working for the company was not eligible for worker’s compensation because they were not classified as an employee even though they drove 40 hours a week. The plaintiff is also seeking damages for overtime worked and for not receiving tips, which they have accused the company of withholding for the service that was provided.
This is not the first time Uber has been in the news involving lawsuits. The former CEO, Travis Kalanick, has been sued for driving up prices to run the competition out of business. Other groups have complained that the ride-sharing companies have an unfair disadvantage over taxi companies and other regulated public transport businesses. This, coupled with low wages for drivers, may impact Uber as it tries to become a public company.
Uber has also had to battle this issue in the UK where it was denied three times on whether it was entitled to classify workers as non-employees. It has now taken the case to Supreme Court as it continues to refuse to provide the employee classification to drivers.
What Should You Do If You’re a Uber Driver
If you are a Uber driver and you feel you may have been treated unfairly or even had tips and gratuity withheld, you may be eligible for a lawsuit. Litigation could help you recover the losses you sustained in your situation. You may also be eligible to participate in an ongoing case to receive a portion of the settlement.
Compensation for claimants in a lawsuit can include recovering lost wages that resulted from rate cuts or other situations. You can learn more if you contact an experienced law firm about the case. They can provide a free evaluation with a no obligation quote to help you determine if you should proceed with the next step.
It often feels unfair to fight against a major company when you are just one person. However, when many people stand together, they can increase the strength of their fight and cause change to take place on behalf of others who are in similar situations. An attorney can help you determine if you have a case against Uber or other ride-sharing companies and what you should do next.
Don’t hesitate to contact a lawyer either over the phone or through email or online. With a free evaluation, you can get legal advice at no cost to you. Fight for your right to fair pay and to receive what you are due.