TIME Companies

Judge Lets Drivers’ Class Action Lawsuit Against Uber Go Forward

Uber
Eric Risberg—AP A man leaves the headquarters of Uber in San Francisco on Dec. 16, 2014.

The lawsuit could set a precedent that reshapes some of the world's most promising young companies

A California judge handed down an order on Tuesday that could spell big trouble for the on-demand economy. Northern District Court Judge Edward Chen determined that 160,000 current and former Uber drivers in the state could be treated as a class, which will allow a lawsuit against the company to go forward. At stake are questions about the future of jobs in America and potentially billions of dollars for one of the world’s fastest-growing companies.

The lawsuit alleges that those drivers were misclassified as independent contractors rather than employees, and that Uber has thus cheated them out of things that employees get under California law, like reimbursements for gas, worker’s compensation and other benefits. The lawsuit also claims that the company failed to pass on tips to the workers.

Chen said in his order the court will allow four named drivers to stand in for the whole lot as lawyers battle over their worker status and tips they may be owed. He denied their request to seek reimbursements for things like gas as a class—saying the four drivers might not be representing everyone’s best interest—but he also gave Shannon Liss-Riordan, the lawyer representing the drivers, 35 days to file arguments convincing him otherwise.

Uber itself has said that if the case doesn’t go in their favor, allowing them to keep treating drivers as contractors—which in turn allows them to avoid costly outlays ranging from payroll taxes to minimum wage—the company might be forced to change its entire business model. That kind of precedent could also send many other companies who have followed Uber’s lead rushing to revamp their business models, converting their booze deliverers or cleaners or handymen to employees. And it would likely influence judges overseeing more than a dozen other cases about the status of workers in the on-demand economy.

At a hearing in early August, Uber’s lawyers argued that their drivers are too diverse—and have such various relationships with the company—that they cannot reasonably be treated as one class. There is no such thing, they asserted, as a “typical” Uber driver. If that argument had prevailed, those 160,000 people would have been left to bring lawsuits on their own, a costly and time-consuming task most likely wouldn’t pursue.

But Chen said that the company was taking an impossible position: asserting on the one hand that all drivers are categorically contractors and then also asserting that they’re so wildly different that no court could treat them all the same. “Uber argues that individual issues with respect to each driver’s ‘unique’ relationship with Uber so predominate that this Court (unlike, apparently, Uber itself) cannot make a classwide determination,” Chen wrote.

A further conference regarding the case has been set for October 22.

Uber did not immediately respond to a request for comment.

TIME Family

A Baby Girl Was Born in the Back of an Uber Car in New York City

The mother was on her way to the hospital from New Jersey

(NEW YORK) — Officials say a baby girl was successfully delivered in the backseat of an Uber car parked at the mouth of the Lincoln Tunnel.

The Port Authority of New York and New Jersey, which operates the tunnel, says the birthing process began around 5:15 p.m. Monday while the baby’s 32-year-old mother was riding in the ride-hailing company’s car.

The driver flagged down two Port Authority officers, telling them he had woman in labor who “couldn’t wait.”

The Port Authority says an employee delivered a healthy baby in just minutes. It was the second baby senior agent Greg Nimmo has delivered while working for the authority.

The mother, who had been traveling to the hospital from Hoboken, New Jersey, was transported to a hospital along with her new daughter.

TIME Uber

Uber Hires Hackers to Secure Its Vehicles

They'll work in the company's self-driving car and robotics research lab

Remember those hackers who remotely took over a Jeep Cherokee from miles away last month? Uber just hired them.

Computer security engineers Charlie Miller and Chris Valasek will work in Uber’s Pittsburgh offices, home to the company’s self-driving car and robotics research lab, the New York Times reports. They’ll work with Joe Sullivan, Uber’s chief security officer, and John Flynn, chief information security officer. Together, they’ll work toward “building out a world-class safety and security program at Uber.”

Miller, who previously worked as a security researched at Twitter, confirmed the move in a tweet, announcing that he’d start Tuesday:

“I’ve been in security for more than 10 years, and I’ve worked on computers and phones,” Miller told the New York Times last month. “This time, I wanted to do something that my grandmother would understand. If I tell her, ‘I can hack into your car,’ she understands what that means.”

TIME Uber

Uber Says its Global Ride Bookings Will More Than Double in 2016

The Hamptons Lure Uber Top Drivers Amid NYC Slow Summer Weekends
Getty Images

The numbers come from a leaked presentation to investors

Ride-hailing company Uber is telling investors that its total bookings will reach $10.84 billion, and more than double in 2016 to $26 billion, according to a report by Reuters.

The report estimates that these figures would generate this year roughly $2 billion in revenue for the company, which takes 20% of booking revenue.

The data come from a slide show Uber prepared with the help of Chinese bankers. The company is planning to aggressively build out its operations in China, and to continue to enter new U.S. markets, such as Albuquerque, N.M.

Uber made news earlier this year as reports in Bloomberg and Gawker showed that Uber continues to loose money, even though revenue growth and — most importantly — investor interest remains strong.

MONEY Workplace

Uber Drivers Would Earn $5500 Per Year in Benefits if Paid as Employees

US-ECONOMY-TRANSPORT-UBER
ANDREW CABALLERO-REYNOLDS—AFP/Getty Images An UBER application is shown as cars drive by in Washington, DC on March 25, 2015.

If recent rulings in California and Florida are upheld, Uber drivers could be treated as employees there.

Uber drivers in six major U.S. cities would receive paid holidays and health care benefits worth an average of $5,500 a year, plus thousands more in mileage reimbursement, if the company provided them with the same benefits as its full-time employees, according to a new NerdWallet study.

The California Labor Commissioner’s Office ruled in June that Barbara Berwick, who worked as an Uber driver for just under two months, was an employee of the company rather than a contractor. The ruling ordered Uber to reimburse Berwick $3,878 for mileage and tolls plus $274 in interest.

Similarly, the Florida Department of Economic Opportunity decided in May that former Uber driver Darrin McGillis had been an employee, entitling him to unemployment benefits, according to a report in the Miami Herald.

While both decisions apply to the individuals involved only and Uber is appealing, if upheld, drivers across the nation could be motivated to seek status as full-time Uber employees.

The decisions related specifically to expenses and unemployment insurance. Drivers stand to gain even more if Uber recognizes them as full-time employees. Based on what Uber offers employees, drivers might expect:

  • Fully covered health insurance, including dental and vision benefits
  • Nine paid holidays
  • Business-driving reimbursement

Uber already provides auto insurance for drivers when they are carrying passengers or are available for trips, but drivers still need to buy coverage for personal use of their cars.

Paid holidays

In a report released in January, Uber said that 14% of its over 160,000 drivers in the U.S. worked at least 35 hours a week. Uber said drivers working full-time earned an average of $17.56 an hour nationwide. Figuring an eight-hour workday, the average hourly wage adds up to $1,264.32 for the nine paid holidays each year if the drivers were full-time employees.

Based on the hourly wage reported by Uber in each city, we calculated the total amount drivers could gain if they were paid for the nine holidays in six places.

  • Boston: At an hourly wage of $20.78, drivers could see $1,496.16 for nine holidays.
  • Chicago: At an hourly wage of $16.21, drivers could see $1,167.12 for nine holidays.
  • Los Angeles: At an hourly wage of $17.07, drivers could see $1,229.04 for nine holidays.
  • New York: At an hourly wage of $29.65, drivers could see $2,134.80 for nine holidays.
  • San Francisco: At an hourly wage of $26.17, drivers could see $1,884.24 for nine holidays.
  • Washington, D.C.: At an hourly wage of $17.70, drivers could see $1,274.40 for nine holidays.

Health insurance

NerdWallet looked at average annual health care expenditures in each city to evaluate what this benefit could mean for drivers. Based on our analysis, here’s the value of health care that drivers could expect to get each year from Uber if they become full-time employees:

  • Boston: $4,518
  • Chicago: $3,982
  • Los Angeles: $2,859
  • New York: $3,585
  • San Francisco: $4,312
  • Washington, D.C.: $4,450

This could mean savings for drivers who are paying for insurance or more health care for drivers who are avoiding medical treatment because of the cost.

Mileage reimbursement

Reimbursement of car-related expenses has the potential to be the biggest benefit. Berwick, the California driver, put in 6,468 miles for Uber in just under two months, according to the decision, which ordered Uber to reimburse her at the IRS rate, currently at 57.5 cents a mile. Berwick’s driving, extrapolated to a full year, would add up to 38,808 miles, meaning $22,315 in reimbursement.

The reimbursement rate is intended to cover the expenses of driving, including gas, oil, insurance, repairs, tires, maintenance and depreciation. AAA estimates the actual cost per mile for a small sedan is 58.2 cents for drivers who put on 10,000 miles per year, 44.9 cents at 15,000 miles a year and 38 cents for 20,000 miles a year.

Berwick won mileage reimbursement because California requires companies to provide it to employees. While there’s no federal requirement, NerdWallet assumed for the purposes of this study that Uber would provide reimbursement at the IRS rate in other states because the company is based in California.

Read next: Uber Reveals How Much Its Drivers Really Earn…Sort Of

Auto insurance

Uber provides liability and uninsured motorist coverage while drivers are on a trip for the company. When drivers are available for trips, Uber provides lesser protection that applies when personal insurance doesn’t cover an accident. But drivers still need to buy policies for personal use of their vehicles. With that in mind, here are average annual car insurance rates for each of the six cities:

  • Boston: $1,174.50
  • Chicago: $1,243.52
  • Los Angeles: $1,175.61
  • New York: $1,614.71
  • San Francisco: $1,013.90
  • Washington, D.C.: $1,390.88

Compare quotes side-by-side using NerdWallet’s auto insurance tool

Methodology

NerdWallet assumed for the purposes of this study that Uber would provide drivers with the same benefits as it gives current full-time employees, including nine paid holidays; fully paid medical, dental and vision plans; and mileage reimbursement at the IRS rate.

We calculated holiday compensation using Uber data on average hourly earnings of drivers who worked a full-time schedule. We estimated the value of the health care package using Bureau of Labor Statistics data on per capita health expenditures. We compared the IRS reimbursement rate for mileage with AAA’s reported cost per mile for a small sedan driven over 20,000 miles a year.

Average annual car insurance rates for each location are from NerdWallet.

NerdWallet staff writer Aubrey Cohen contributed to this article.

More From NerdWallet:

MONEY Workplace

Seniors Want in on the Sharing Economy

522430313
Franz Marc Frei—Getty Images

10% of Airbnb hosts are over 60 and nearly 25% of Uber drivers are over 50.

Five dollars may not sound like much pay for doing a job, but do not tell that to Brooke Folk.

At age 67, Folk spends up to 30 hours a week on projects generated through Fiverr.com, a shared-economy website that requires all its vendors to offer something to customers for just $5 and takes a 20% commission on earnings.

Folk, a former radio announcer and small business owner who lives near Pittsburgh, earns approximately $10,000 per year in supplemental income to his Social Security benefits on the site writing short stories and narrating scripts. He also sells – no surprise here – an ebook explaining how to succeed on Fiverr.

“When I first heard about it, I wondered if I should do something for $5, but what happens is you often upsell customers something additional. The most that I’ve billed an account is $1,300, and that’s a far cry from $5.”

More Americans than ever intend to keep working past traditional retirement age – whether it’s just to keep busy or because they need to financially – and entrepreneurship is becoming a more common alternative to full time jobs.

Entrepreneurs age 55-65 accounted for 26% of all startups last year, up from 15% in 1996, according to the Kauffman Index of Entrepreneurial Activity.

Fiverr may be a millennial-dominated platform with just 2% of sellers over the age of 55, but growth in vendors age 55-64 shot up 375% at the end of the second quarter this year compared with a year ago, according to the company.

Starting a business may sound like a risky investment of capital, but it does not have to be. A “micro-enterprise” – or side-gigging – can help retirees generate supplemental income without putting capital at risk and perhaps even enough to stall filing for Social Security or ease the pressure for drawdowns from retirement portfolios.

Folk is participating in an emerging online ecosystem that helps micro-entrepreneurs leverage their accumulated knowledge and experience. Other platforms include retail site Etsy.com (handmade and vintage items), and freelance marketplaces Guru.com and Freelancer.com.

But the action is not limited to the knowledge economy. For example, Airbnb recently noted that 10% of its hosts are over age 60.

Older Drivers

And AARP’s Life Reimagined – a program focused on guiding people through life transitions – recently announced a partnership with Uber aimed at recruiting older drivers. Life Reimagined has 1.4 million members; for Uber, the alliance is part of a strategy to hire hundreds of thousands of drivers as it works to meet surging demand for its service.

If driving strangers around in your own car for hours on end does not sound like an ideal retirement to you, AARP begs to differ. While it is not putting an age limit on applicants, AARP sees the Uber program as ideally suited to the younger end of its constituency – workers over 50 who have been sidelined by economic turbulence.

“The shared economy is offering people an opportunity to follow their hearts, have flexibility in their work, be empowered to make money and be their own bosses,” says Adam Sohn, vice president of strategic initiatives at Life Reimagined.

“And, for millions of people who are doing what they don’t love, or have been pushed out of precarious jobs and are having trouble fighting their way back into the workforce, this kind of work also can provide a transition to whatever is next.”

Microentrepreneurship certainly offers a path around the age discrimination that older workers face.

In an AARP study released earlier this year, more than half of older workers who lost jobs during the Great Recession said age discrimination had a significant impact on their ability to find new work. But in the gig economy, if you can get the job done, no one cares about your age.

Nearly 25% of Uber’s drivers are over age 50, according to a study commissioned by the company recently – and among new drivers with no previous professional driving experience, 39% are over 50. 3% were retired before driving for Uber, and 8% were unemployed; one in five drivers was employed in a temporary job.

Uber does not disclose data about the earnings of its drivers, but the report states that drivers are making $19 per hour on average.

TIME legal

Prosecutors: Uber Hired Drivers With Criminal Records

An Uber ride in Washington on April 8, 2015.
Andrew Harrer—2015 Bloomberg Finance LP An Uber ride in Washington on April 8, 2015.

Prosecutors say Uber has knowingly continued to mislead consumers about the thoroughness of its screening methods

Uber hired 25 drivers in Los Angeles and San Francisco with criminal records ranging from property crimes, sex offenses and murder, prosecutors said on Wednesday.

“We are learning increasingly that a lot of the information that Uber has been presenting the consumer has been false and misleading,” George Gascon, district attorney of San Francisco, where Uber is based, said at a news conference, the New York Times reports.

The comments came after the attorneys announced they were filing a 62-page amended complaint to the original civil suit, filed in December, that claims the ride-hailing app has knowingly continued to mislead consumers about the thoroughness of its screening methods.

Gascon, who has led investigations, noted that the records Uber uses to check applicants for sex offenses are missing 30,000 individuals whose convictions occurred more than seven years ago, allowing them to escape the company’s notice.

Uber has said in the past that the limited scope of its background-check providers is required by some state laws, and is in fact a way for the company to help rehabilitate offenders. “We understand that there are strongly held views about the rehabilitation of offenders,” Uber said in a blog post dated July 15. “But the California state legislature decided — after a healthy debate — that seven years strikes the right balance between protecting the public while also giving ex-offenders the chance to work and rehabilitate themselves.”

Uber has noted that Live Scan, another method of vetting drivers favored by many of the company’s critics, is not subject to seven-year limits. The prosecutors’ complaint asserts that a Live Scan system would have been more effective.

Uber said it disagreed that the screening process used by taxi drivers was better than its own checks. “The reality is that neither is 100% foolproof—as we discovered last year when putting hundreds of people through our checks who identified themselves as taxi drivers,” Uber told TIME in a statement. “That process uncovered convictions for DUI, rape, attempted murder, child abuse and violence.” Uber also noted that its rival Lyft had settled a similar case last year for $250,000.

While traditional cabs are required to use Live Scan, Uber is not, but prosecutors believe that the company has oversold the effectiveness of its own checking methods.

[New York Times]

TIME Uber

Food Delivery Is Taking Center Stage In Uber’s App

A redesign puts food delivery services front and center

Uber’s experiment with delivering food (and even ice cream) has been a side project so far, but now it has earned its own button in the ride-hailing company’s mobile app.

The company’s food delivery option, UberEATS, is appearing as a separate button in a latest update of the app in some cities, according to Business Insider. Uber launched the service in Los Angeles last year, and has since expanded it to New York City, Toronto, Austin, Chicago, and Barcelona. Every day, the company offers a select menu of dishes from local partner restaurants.

Previously, the UberEATS button was located at the bottom, alongside Uber’s other options, such as UberX, UberBlack, and so on. Now, it’s at the top, next to an icon for Uber’s ride-hailing options, letting users easily flip between using the app for ride-hailing needs, and as a food-ordering app.

The button’s newfound prominence is certainly an additional nod at Uber’s aspiration of doing more than shuttling people around cities. The company has long spoken of its ambitions to provide logistics, and food is a first step in seeing how it can handles that type of operation. Rival Lyft, while it has no plans to move beyond passengers, has looked into delivery, according to comments made by Lyft CTO Chris Lambert at a press event on Friday. Gett, an Israel competitor, recently launched an on-demand delivery option for Veuve Cliquot champagne in London.

TIME

Now Outlook Can Order You an Uber, Make a Paypal Payment

Uber Tops Taxis
Jeff Chiu—AP

Microsoft is adding Uber, PayPal, Evernote, and Boomerang add-ins to its email services

In its quest to make Outlook as cool as Google’s Gmail, Microsoft is adding some bells and whistles to its email service.

Starting now, Outlook.com users can integrate Uber, PayPal, Evernote, and Boomerang add-ins into their email and calendar. This means users can connect their account to these and receive useful notifications, such as to order an Uber ride prior to a meeting (and even ordering it through the reminder), or the ability to send a friend some money through PayPal via email. Some of these add-ins — like Uber and Boomerang — were already available for the few with access to Outlook.com’s new design, though the company is rolling it out to more users now.

Add-ins for business reviews community Yelp, to-do list software Wunderlist (which Microsoft acquired), and IFTTT, a service for connecting all kinds of apps and notifications, will be coming in the future, Microsoft said.

Uber, PayPal, Evernote, and Boomerang are all already available on Outlook 2013 and Outlook on the web for users with Office 365, and Exchange 2013 mailboxes, with Outlook.com coming soon.

TIME Uber

This Could Be Why You’re Getting a Low Uber Rating

Uber At $40 Billion Valuation Would Eclipse Twitter And Hertz
Bloomberg—Bloomberg via Getty Images

This may not apply to those of you who've puked in the back seat of an Uber car

If you have an Uber rating lower than 5 stars, it could be because you don’t tip.

But don’t feel bad: you’re not the only one. There has been a lot of confusion surrounding this subject since the driving service’s inception.

When asked about tipping, Uber gave the following response to MarketWatch: “There is no need to tip. Once you arrive at your destination, your fare is automatically charged to your credit card on file, making for a cashless and seamless experience.”

Uber’s appeal is that it requires no cash; it doesn’t even require any physical transaction since your credit card is automatically charged without any necessary action on the part of either the driver or the passenger. You can get in and out as smoothly as possible.

Earlier this year, Uber released a survey, commissioned by the company, showing that its drivers make more than taxi drivers; hence, no need to tip. However, UberDriverDiaries.com asserts that many of them don’t even reach minimum wage, so a tip is much appreciated and could get you that 5-star rating.

The company could potentially eradicate some confusion and maintain its seamless, cashless driving experience if it adds a feature that allows passengers to tip virtually. An online petition asking for just that has garnered over 20,000 signatures so far.

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