Ride-hailing company Uber could potentially have to pay out a much larger sum to drivers in a lawsuit against the company now that a federal judge has granted the case class action status.
The two-year-old lawsuit centers on whether Uber has misclassified its drivers as contract workers instead of company employees, and if so, could owe the plaintiff reimbursements for expenses. While the case was originally filed on behalf of just four current and former drivers, the class certification Judge Edward Chen of the U.S. District Court of Northern California now opens the company to a much larger pool of potential plaintiffs. To date, more than 160,000 people have worked for Uber as drivers in California.
According to the judge's decision, drivers as a whole can sue over their misclassification as contractors, and reimbursement of certain tips. The judge has denied, however, the plaintiffs' request for multiple sub-classes of plaintiffs and reimbursement of other expenses.
“While we are not surprised by this Court's ruling, we are pleased that it has decided to certify only a tiny fraction of the class that the plaintiffs were seeking. Indeed one of the three named plaintiffs will not qualify. That said, we'll most likely appeal the decision as partners use Uber on their own terms, and there really is no typical driver--the key question at issue," an Uber spokesperson told Fortune via email.
Much of the debate during the early August hearing on the matter focused on how much control Uber exerts over its drivers, and whether the drivers are similar enough to be lumped into one group. Uber's attorney, Ted Boutrous also attempted to argue that Uber's contracts were merely licensing agreements (Uber often touts itself as a technology platform for connecting drivers and riders) and not labor contracts, though the judge largely dismissed the idea.
Ultimately, the plaintiff's attorney, Shannon Liss-Riordan, posited that Uber's relationship with its drivers met seven of the nine points in a state legal test to determine whether someone is a contractor or employee. She also argued that regardless of the 400 "happy" drivers Uber had corralled to provide testimonials, the decision should create the best policy, not give into "what people want."
Liss-Riordan also suggested that the the settlement focus on reimbursement of mileage expenses, which can be calculated from Uber and IRS records, though the judge has denied this part of the class certification request.
A similar lawsuit against Uber rival Lyft, as well as others against on-demand companies like Instacart, Postmates, and Homejoy, have been filed by Liss-Riordan.