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Are Uber Drivers Employees or Independent Contractors? The Classification Debate

By of Aceto, Bonner & Cole, PC. posted in Business & Commercial Law on Wednesday, May 25, 2016.

Within the last several years, Uber has become one of the largest ride-hailing services in the country. The company has millions of drivers to accommodate the heavy volume of ride demands. While the company classifies their drivers as independent contractors, Uber drivers consider themselves employees. All over the country, Uber drivers have filed numerous class action lawsuits against Uber, arguing that they have misclassified their drivers. Uber drivers in California and Massachusetts just settled the most recent suit, but not with the outcome they were seeking.

Uber drivers brought suit against Uber to determine that they are employees of the company and not independent contractors. Unlike independent contractors, employees are entitled to protections, rights and potential benefits such as reimbursement for expenses. Currently, Uber drivers are not reimbursed for any work-related expenses they incur based on their classification as independent contractors. Rather than taking the case to trial, Uber settled with its drivers for $100 million.

This settlement and many others like it, means Uber drivers are still classified as independent contractors and not employees. Therefore, they are not going to be entitled to employee benefits in the future. This does not mean, however, that Uber drivers are barred from bringing claims later to be deemed as independent contractors. It also does not restrict future courts or labor authorities from considering Uber drivers as employees. For now, Uber drivers will continue to be considered independent contractors, but this settlement makes them $100 million richer.