Uber Might Have To Shell Out Millions To Drivers For Gas Compensation


Uber Might Have To Shell Out Millions To Drivers For Gas Compensation

Uber drivers in California want to be better compensated for their work. The drivers are filing a class action lawsuit demanding 57.5 cents for every mile that they log on their trips. A court hearing on the matter is set to take place this week on Tuesday. A trial is expected to occur in June of next year.

The debate as to whether or not the drivers can seek compensation for the mileage on their own vehicles has dated back to the company’s founding in 2009. If the court ultimately decides that Uber has to compensate its drivers for their mileage, the company would be on the hook for hundreds of millions of dollars.

At the hearing on Tuesday, United States District Judge of San Francisco Edward Chen will decide whether or not to add more drivers to the class action lawsuit. Drivers who joined the company in 2014 and later might be excluded from the lawsuit because of a clause in their contracts. The lawsuit is posing a major threat to both the company’s business model and its $50 billion valuation.

Already, the Uber drivers have received permission from the Judge Chen to file the lawsuit as a group. They claim that they have been denied basic rights as independent contractors. If a ruling is made against Uber, it could pose a major threat to the company.

Employment lawyer Beth A. Ross said, “It really calls into question the economic feasibility of Uber’s business model. Which isn’t to say Uber couldn’t operate the very same service that it provides now, in a lawful manner, by treating these drivers as employees and paying them as employees, and still make money. But as a company that bills itself as a technology platform rather than a transportation provider, Uber appears to be resisting an overhaul of its administrative infrastructure to conform with the employee model.”

A spokesperson for Uber has declined to comment on the matter, saying that the company’s position is outlined in the filings of the court.

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