On February 15, 2018, Judge William Alsup of the U.S. District Court for the Northern District of California granted class certification in Dulberg v. Uber Technologies, Inc., a suit filed in February 2017 alleging that Uber’s pricing and payment model deprives drivers of fair pay for their work. This decision will allow as many as 9,197 Uber drivers from across the United States to pursue their claims as a class.
Uber is among the most successful of a number of rapidly growing companies that are part of the so-called “gig economy.” The U.S. Department of Labor defines a “gig” as a “single project or task for which a worker is hired, often through a digital marketplace, to work on demand.” Gig economy and freelance workers, such as Uber drivers, are becoming an increasingly visible and important component of the U.S. workforce; an estimated nearly four million freelancers work in the New York City area alone. Yet while gig economy workers may enjoy certain benefits—such as scheduling flexibility—they are also often at a disadvantage in comparison to traditional employees. Gig economy workers are almost invariably classified as independent contractors and are thereby cut off from most of the legal protections afforded to employees, including minimum wage and overtime laws, as well as employment benefits like health insurance—and many freelancers report difficulty getting paid for their work on time or at all.
Uber’s treatment of its gig economy workers has gained particular attention over the past several years, as drivers have brought a number of lawsuits against the company and have protested many of Uber’s internal policies, such as its recently revoked harsh termination policy, under which any driver with three complaints would be automatically terminated without investigation. Recently, a U.K. court issued a landmark decision, finding that Uber’s London drivers were employees, not independent contractors, and we have previously reported on several lawsuits brought by Uber drivers concerning whether drivers’ on-call time is compensable, drivers’ arbitration agreements with Uber, and class actions challenging Uber’s classification of drivers as independent contractors.
In Dulberg, Uber driver Martin Dulberg alleges that Uber’s payment and pricing model systematically underpays drivers for their work. Uber charges riders a flat fee for their trip, determined based on an exaggerated estimate of the trip’s distance and duration. According to Dulberg’s complaint, Uber tells its drivers that they will receive a certain percentage of a rider’s flat fee payment as compensation for their work, but actually pays drivers based only on a trip’s actual distance and duration—both of which are typically less than the pre-ride estimate. As a result, Dulberg alleges, Uber regularly pays its drivers less than the amount to which they are entitled under their agreement with the company.
Dulberg brought suit on behalf of all Uber drivers who had been subjected to this payment model, a group which includes thousands of workers located across the country. Uber argued against class certification on the grounds that the company could present individual defenses to drivers’ claims and that the policies in question hadn’t resulted in less pay for all affected drivers. The court was unpersuaded, however, calling the case a “classic case of a class action,” and allowed the class claims to move forward. While Dulberg doesn’t address the question of whether Uber’s drivers are properly classified as independent contractors or employees, the court’s decision last week does recognize that many of Uber’s drivers are subjected to the same payment policies and practices and represents an important step towards ensuring that drivers receive fair payment for their work.
If you believe that your employer has violated wage-and-hour laws, contact The Harman Firm, LLP.