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Judge Certifies Uber Drivers' Lawsuit as a Class Action

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Adnan Aloudi, a full-time driver for Uber and Lyft, drives through downtown San Francisco on Aug. 31, 2015. The 23-year-old likes being an independent contractor because of the flexibility. 'You're your own boss,' he said. (Ericka Cruz Guevarra/KQED)

A federal judge in San Francisco has ruled that a lawsuit by a group of Uber drivers seeking to be classified as employees instead of independent contractors can move forward as a class action against the company.

U.S. District Court Judge Edward Chen said the key question before him was whether drivers' working relationships with Uber were "sufficiently similar so that a jury can resolve [their] legal claims all at once."

In a 68-page ruling, Chen called a number of Uber's arguments -- including that its drivers are too diverse to be considered a class -- "problematic."

While the case could potentially affect 160,000 California Uber drivers, Chen excluded drivers who signed a 2014 arbitration clause. With that group excluded, he ruled the class will include UberBlack, UberX and UberSUV drivers who signed up with the company and were paid as individuals over the past six years.

Shannon Liss-Riordan, a Boston-based labor attorney who represents the drivers, said that means most California drivers who worked for Uber before May 2014 could be included.

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"This decision is a major victory for Uber drivers," Liss-Riordan said. "It will allow thousands of Uber drivers to participate in this case to challenge their misclassification as independent contractors."

An Uber spokeswoman, Natalia Montalvo, interpreted the class certification in an email as applying to "a tiny fraction of the class that the plaintiffs were seeking."

"We'll most likely appeal the decision as partners use Uber on their own terms, and there really is not a typical driver, the key question at issue," Montalvo said.

Last month, before the federal court hearing on class certification, Uber attorney Ted Boutrous accused the three drivers who are lead plaintiffs of "acting against the interest of the very people they seek to represent."

Boutrous, surrounded by about a dozen Uber drivers, repeated Uber's position that drivers like being independent contractors because it allows them freedom over their schedules.

But after that hearing Liss-Riordan stressed, in an interview with reporters, that drivers aren't entitled to basic wage protections, unemployment pay if they are terminated, or workers compensation if they're injured on the job.

"Everyone understands the flexibility. We understand that. That's the reason why a lot of drivers do it," she said. "But that doesn't mean they're not entitled to the protections of employment when they're doing their work."

Liss-Riordan said there's no reason why the flexibility couldn't continue if the suit prevails. Chen seemed to concur in his ruling: "Uber has not definitely established that all (or even much) of this 'flexibility' would necessarily be lost, nor has Uber even established that a victory for Plaintiffs in this lawsuit would require Uber to use 'less flexible' work schedules going forward."

As we've written, if the suit is successful it could have sweeping consequences for Uber, threatening the company's business model that relies on drivers to pay their own expenses and work as independent contractors.

The three drivers are seeking reimbursement for those expenses, including gas and car maintenance, as well as tips that Liss-Riordan said were advertised to customers as being included in the fare but not distributed to drivers.

If drivers become employees, Uber would be required to pay expenses -- under California's wage law -- withhold taxes and pay for unemployment, Social Security and workers compensation.

Pending the outcome of any appeal of Tuesday's ruling, the case is expected to go to trial sometime next year.

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