“They started off by operating illegally, without following any of the regulations and unfairly competing. And that’s how they became big—they had enough money to ignore all the rules.” -Barry Korengold, president of the San Francisco Cab Drivers Association
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In today’s fast-paced, technologically savvy world, smartphones rule the way we conduct our daily lives. So when San Francisco-based company, Uber, created an app that allows a person to request transportation from their smartphone, it did not take long for the company to become wildly popular and successful.
Here’s how it works: according to Uber’s website, once a user requests a ride, the app finds the users location through the phone’s GPS system, and once it receives a ride request it dispatches the request to a respective Uber driver who takes the app-user to his or her requested destination. While Uber basically operates as a taxi service to its passengers, the main difference is that Uber drivers drive their own cars and can be anyone who passes the required background checks.
In 2010, Uber gave its first rides in San Francisco, but by the end of 2011, the company had spread to major cities across the United States and even extending internationally to Paris. By the end of 2015, Uber’s services expanded so vastly, reaching all types of transportation needs and operating in countries all around the world. Not only were Uber drivers replacing traditional taxi cabs, but Uber’s services included bicycle delivery, carpooling, moving and delivering, and on-demand food delivery. With all the explosive success, what could go wrong?
In 2013, tensions arose between Uber and its drivers. A lawsuit was originally brought in California by four Uber drivers from the San Francisco area “who wanted the company to reimburse them for their business expenses. Uber claims it’s not required to pay for things like gas, insurance, and car-maintenance since drivers are not employees, but rather independent contractors.” What started as a lawsuit between the four drivers and Uber quickly expanded to a class action suit that involved over 160,000 drivers in the state of California. “Plaintiffs contend that they and all 160,000 putative class members are Uber’s employees, as opposed to its independent contractors, and thus are eligible for various protections codified for employees in the California Labor Code.” While the court ruled that Uber drivers can bring this action against Uber as a class, trial is set for June 2016 for a jury to decide whether these drivers are employees, as the plaintiffs argue, or independent contractors, as Uber argues.
Employee or Contractor?
This case turns on one crucial classification – are the drivers employees or independent contractors under California’s common-law test of employment. When the court applied this test “at the summary judgment stage, the Court determined that because Uber drivers ‘render service to Uber,’ they are Uber’s presumptive employees as a matter of law . . . although the ultimate question of their employment status will need to be decided by a jury.”
In order to determine whether these drivers are employees, the court looked to the opinion in Borello, which “’enumerated a number of indicia of an employment relationship.’ The ‘most significant consideration’ is the putative employer’s ‘right to control work details.’” “Uber attempted to characterize its business as a ‘lead generation’ platform, claiming it doesn’t have control over how its drivers provide services.” However, Uber drivers have argued that the reality is quite to the contrary. The drivers argue “that they have no say in how much Uber charges riders [and] . . . . [d]rivers are prohibited from making their own deals with riders or from undertaking any direct or indirect solicitations of business. Uber also conducts background checks, interviews, and preengagement tests of their knowledge and submits drivers to a detailed ranking system.” Based on these facts, the drivers claim the company maintains control over their work.
While the facts and case are tending to lean in favor of the drivers, it will ultimately be up to the jury to decide the classification as employees or not. Additionally, while this case involves only the drivers of California, the outcome could spur litigation elsewhere and force companies involved in the “sharing economy” to rethink their business plans, and also Uber app users to rethink their mode of transportation.
 Kara Swisher, Man and Uber Man, Vanity Fair (Dec, 2014), http://www.vanityfair.com/news/2014/12/uber-travis-kalanick-controversy.
 See Ottawa Citizen ‘Uber ride-sharing program seeks Ottawa drivers,’ available at http://ottawacitizen.com/news/local-news/uber-ride-sharing-program-seeks-ottawa-drivers; See also Wall Street Journal ‘Worth It? An App to Get a Cab,’ available at http://blogs.wsj.com/digits/2011/06/17/worth-it-an-app-to-get-a-cab/.
 John Patrick Pullen, Everything You Need to Know About Uber, time, (Nov. 4, 2014), http://time.com/3556741/uber/.
 Nathan McAlone, Here’s how Uber got its start and grew to become the most valuable startup in the world, Business Insider, (Sept. 13, 2015, 8:00 AM), http://www.businessinsider.com/history-of-uber-and-its-rise-to-become-the-most-valuable-startup-in-the-world-2015-9.
 Avi Asher-Schapiro, That Little Lawsuit Against Uber Just Got Bigger – And Could Take Down the Sharing Economy, vice news, (Dec. 10, 2015), https://news.vice.com/article/that-little-lawsuit-against-uber-just-got-bigger-and-could-take-down-the-sharing-economy?utm_source=vicenewsfb.
 O’Connor v. Uber Technologies, Inc., No. C-13-3826 EMC, 2015 WL 5138097 (N.D. Cal. Sept. 1, 2015).
 Michael Malloy, Independent Contractors and the “Sharing Economy”: Court Sends Uber Drivers’ Case to Jury, 20 No. 9 Me. Emp. L. Letter 2 (May 2015).
 Supra, note 7.