Ride sharing companies such as Uber and Lyft are bursting on the scene in Boston and other cities and are making headlines for a variety of reasons.
Uber made some big news when a judge in California ruled earlier this month that Uber drivers can proceed with a class-action lawsuit against the company. The judge ruled that 160,000 current and former Uber drivers could go forward as a class, possibly setting up a precedent against the on demand economy.
Boston based attorney Shannon Liss-Riordan, who has a reputation for being a tenacious labor lawyer, filed the lawsuit and she tells WGBH Morning Edition host Bob Seay that the suit challenges Uber drivers mis-classification as independent contractors, by denying that the drivers are employees.
She says, “by calling them independent contractors, Uber can save massively on its labor costs. It doesn’t have to worry about complying with wage laws including unemployment, workers compensation or the ability of the drivers to bargain collectively and form a union.”
Liss-Riordan says she is challenging this model and claims the Uber drivers should have these rights.
UBER BOSTON STATISTICS
According to MASSter List, which compiled Boston figures regarding Uber from a Forbes May 2015 article, the company has cast a wide net in the city:
- Number of active Uber drivers in the Boston area (end of 2014): nearly 10,000
- Number of licensed taxi drivers in Boston: 6,400
- Number of taxis licensed in the city of Boston (2013): 1,825
- Boston Uber drivers earnings per hour: $20.29
- Average taxi driver hourly earnings: $12.92
- Percentage of fare money UberX drivers get to keep: 80%
- Typical cost to lease a cab for a 12-hour shift: $100
- Percentage of Boston cabbies who have signed on as Uber drivers: 21%
- Year-over-year decline in Boston taxi revenue for the first half of 2015: 22%
- Percentage decline in a Boston taxi medallion: 50% -- to $350,000
- Market valuation of Uber: $50 billion
For the complete Forbes May article click on this link:http://www.forbes.com/sites/briansolomon/2015/05/01/the-numbers-behind-ubers-exploding-driver-force/
Liss-Riordan says other ride-sharing companies in this case are watching a decision closely. She says she also has a number of other cases against other ride hailing companies such as Lyft.
Uber argues it doesn’t employ drivers, but instead facilitates connections between customers and entrepreneurs.
Liss-Riordan says the federal court rejected Uber’s argument that it’s a technology…. just because it uses a smart phone to make a connection.
By mis-classifying drivers as independent contractors it allows companies like Uber to save enormously on its labor costs, according to Liss-Riordan.
The suit, which now has class-action status, will go to trial sometime next year. The outcome is expected to have a ripple effect on the ride sharing economy.
To listen to the entire interview on the Uber class action lawsuit case with Boston based attorney Shannon Liss-Riordan click on the audio file above.
