Ride App Class Actions May Impact 1099 Business Model
Law360, New York (March 30, 2015, 12:52 PM EDT) -- March 11 was a tough day for ride-booking startups Uber Technologies Inc. and Lyft Inc. as federal judges in the U.S. District Court for the Northern District of California issued separate decisions in class actions brought by drivers from both companies. Those drivers allege that Uber and Lyft misclassified them as independent contractors instead of employees, thereby depriving the drivers of many employee benefits. Both Uber and Lyft filed motions with the court seeking summary judgment on the grounds that they properly classified the drivers as independent contractors. The courts in both cases denied the motions and ruled that juries would have to decide whether the drivers are employees or independent contractors. See O'Connor v. Uber Technologies Inc., No. 3:13-cv-03826-EMC (N.D. Cal. Mar. 11, 2015); and Cotter v. Lyft Inc., No. 3:13-cv-04065-VC (N.D. Cal. Mar. 11, 2015)....
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