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U.S. Judge Gives Uber Drivers Class Action Status

Long Story Short: Uber Controversies 2:08

A U.S. judge said on Tuesday Uber drivers are entitled to class action status in litigation over whether they are independent contractors or employees, part of a case that could have wide implications for the sharing economy.

Three drivers sued Uber in a federal court in San Francisco, contending they are employees and entitled to reimbursement for expenses, including gas and vehicle maintenance. The drivers currently pay those costs themselves.

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In the ruling, U.S. District Judge Edward Chen in San Francisco said drivers could sue as a group. Such a designation means the suit could cover more than 160,000 California drivers and could give plaintiffs more leverage to negotiate a settlement.

Representatives for Uber and the drivers could not immediately be reached for comment.

The results of Uber's legal battle could reshape the sharing economy, as companies say the contractor model allows for flexibility that many see as important to their success. An ultimate finding that drivers are employees could raise Uber's costs beyond the lawsuits' scope and force it to pay Social Security, workers' compensation, and unemployment insurance.

In June, a California labor commissioner ruled that an Uber driver was an employee, not a contractor. Uber has appealed that decision.