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Drivers Sue Uber While Challenging Fundamental Business Model

05 Oct

Drivers Sue Uber While Challenging Fundamental Business Model

Uber is fighting a legal war with its three drivers, who believe that they should be treated as its employees.

Uber has taken a step to defend its operations. Uber news affirmed that the Californian enterprise has appealed against a federal judge’s certification of a class-action petition that tends to challenge its basic commercial platform.

Uber news today revealed that a federal judge approved class-action status to a petition brought forward by three driving partners who have claimed that they are the organization’s workers, not contracted operators, and therefore have the right to healthcare benefits and other charges normally paid by an employer. The U.S District Judge, Edward Chen’s ruling declared that the petition should be applied to all Uber employees in California, who have not renounced their right to the class-action arbitration.

Uber breaking news informed that the enterprise opposed with a 22-page appealing request claiming that Mr. Edward’s decision is “manifestly erroneous” and the court should reconsider its judgment. In the lawsuit, Uber’s lawyer, Ted Boutrous, raised the question that how a petition applicable to three driving partners could be a representative of many others, as their backgrounds differ from each other and how they employ a facility, an idea at which Uber’s legal team has focused in a hearing last month.

The company’s market value has increased to $51,000,000,000 on the ground that it is operating an application-based network linking passengers and drivers, rather than a taxi company that owns vehicles and hires drivers.

If the litigation is successful enough, Uber could be compelled to pay employees compensation, health insurance, and work expenditures, such as car repairs, fuel, and tolls. The legal battle is being given extraordinary importance in Silicon Valley where a significant number of emerging enterprises are relying on independent contractual workers to supply food, do tasks and chores, and wash houses. Several other businesses have been challenged by similar legal actions, and a few have changed their commercial model partly resulting from potential legal wars.

The lawyer representing the three drivers, Shannon Liss-Riordan, stated that the transporter’s appeal is impulsive because Mr. Edward is still trying to determine the latitude of the class certification.

“I would be very surprised for it to be reversed,” she stated in an e-mail. “There is nothing novel about certifying these claims; independent contractor misclassification cases are typically addressed on a classwide basis.”

It is probable that conventional taxi companies and their drivers would enjoy the legal dispute. Industry experts have claimed that the recent development would damage Uber’s reputation.

The corporate executives of the company should ensure that its appeal succeeds to retain its position in the highly competitive market.

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Posted by on October 5, 2015 in Technology, UBER

 

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