Car booking firm gets a month to pay fine or lose operating license in its home state for not complying with laws.
A US federal court judge has granted class-action status to court cases filed by Uber drivers who are claiming benefits from the company on the basis that they have been treated like employees but only paid as contractors.
The original suit, O’Connor v Uber Technologies, involved just four drivers who sued Uber in 2013 for reimbursement of certain expenses including petrol and vehicle maintenance.
However, a decision on Tuesday by Judge Edward Chen of the US District Court in San Francisco has reportedly opened the case to as many as 160,000 current and former Uber drivers who have worked for the company in California.
Uber, in a statement on Tuesday, denied that the case would affect as many drivers, and said that only a few hundred drivers would be able to participate in the action.
“This is because the ruling found that only drivers who either stopped driving before June 2014 or drove after June 2014 but chose to opt out of the arbitration option in their agreements, are eligible,” Abby Horrigan, the managing counsel for employment at Uber said in a statement on the group’s website.
“Before June 2014, our business in California was mostly UberBLACK, primarily drivers who work for limo companies: They cannot be part of the case. This is because the court has ruled that those drivers never had a contract directly with Uber. Individuals who registered with Uber as a corporation also cannot participate in the class [action],” the statement said.
An Uber spokesperson told the AFP news agency that the company would “most likely appeal the decision as partners use Uber on their own terms and there really is no typical driver – the key question at issue”.
However, the case could have broad implications for the “sharing” economy, which is currently based on independent contractors earning money through web-based services that offer them little or no employment protections like pension contributions or health insurance.
“This case is going to have a major effect on not just Uber but all these businesses and business models,” Saint Louis University law professor Miriam Cherry told the tech news website Ars Technica.
In a separate case in June, a California labour board ruled that an Uber driver was an employee, not a contractor. But that ruling applied only to that single driver.
Democratic presidential frontrunner Hillary Clinton also said recently she would “crack down on bosses who exploit employees by misclassifying them as contractors”.
“This on-demand, or so-called gig economy, is creating exciting economies and unleashing innovation,” Clinton said in June.
“But it is also raising hard questions about workplace protections and what a good job will look like in the future.”