On Wednesday, Uber and Lyft, two taxi service companies, went before judges who ruled that their lawsuits should be decided by a jury. Ruling on the Uber case was United States District Court Judge Edward Chen, and for the Lyft case was District Court Judge Vince Chhabbria. Both judges concluded that although each company views itself as a platform for their riders to hail a taxi, they come close to crossing the line of employment with their drivers.
Uber and Lyft argue that their drivers act as independent contractors because they decide their own hours and who they offer rides to. However, the judges suggested that the drivers act as employees in other ways. Chen discussed that certain aspects of the company-driver relationship seem very employee-like, such as Lyft requiring that its drivers keep their radio turned to NPR, Jazz, or completely off.
The judges also noted in their decisions that requirements like demanding the drivers to charge a certain amount, meeting customers with fist-bumps, and vacuuming their cars at least once a week come very close to employee contract requirements. Lyft also receives a 20 percent tax on all fairs their drivers earn. The two companies are also able to fire the employees for low passenger ratings or for no reason at all.
Chhabria, after reviewing the Uber case, opined, “[a] reasonable jury could go either way.” This is a landmark case for companies like this that are growing rather rapidly around the world. The Uber and Lyft drivers are considering the rulings by the two judges as a partial victory. Though, Chhabbria is not so quick to assume Uber drivers will earn their sought after status of employee. He noted that the, “jury in this case will be handed a square peg and asked to choose between two round holes.” He explained that he does not think Uber drivers specifically fit into the category of independent contract workers or that of employee. He said perhaps the legislature will have to create a new category all together.
Forbes has reported that both Uber and Lyft have recently been conducting fundraising campaigns to aid in combating some of their expenses. Rakuten, a Japanese E-commerce powerhouse, aided in earning $530 million for Lyft and Uber has reported raising more than $5 billion. Fortress Investment Group has placed a value of $2.5 billion on Lyft. Many view this an impressive estimated worth for a company that is only three years old. These statistics show that the two companies are clear leaders in their industry and have been competitive in gaining their loyal clientele. They do appear to be standardizing, though. This has been seen in Lyft’s pulling back from certain eccentricities that set it apart from Uber, like their mustaches on the front of their cars.
The ruling by the two judges to allow juries to decide on the lawsuits brought by Uber and Lyft drivers is a landmark decision. The future of the drivers is now in the hands of the legislature. They will have to wait idly by with the rest of the public until these juries reach their verdict.
By Joel Wickwire
Photo by Nav Jagpal – Flickr License
Photo by Jon Haynes Photography – Flickr License