Business

Uber, Lyft Rebuffed in Bids to Deem Drivers Independent Contractors

Uber has started charging New Yorkers who use its e-hailing service to get yellow cabs a $2 booking fee. The fee is not applicable for the company's UberX service, which deploys black cabs. (Courtesy of Uber)
Uber has started charging New Yorkers who use its e-hailing service to get yellow cabs a $2 booking fee. (Courtesy of Uber)

 

(Reuters) – Ride-hailing apps Uber and Lyft failed to persuade separate U.S. judges on Wednesday to rule that their drivers are independent contractors instead of employees, in cases that have wide implications for Silicon Valley “sharing economy” firms.

U.S. District Judges Edward Chen and Vince Chhabria in San Francisco federal court said in two rulings that juries would have to determine the status of each companies’ drivers.

Uber and Lyft face separate lawsuits seeking class-action status in San Francisco, brought on behalf of drivers who contend they are employees and entitled to reimbursement for expenses, including gas and vehicle maintenance. The drivers currently pay those costs themselves.

An ultimate finding against the two biggest car-ride services could significantly raise their costs beyond the lawsuits’ scope and force them to pay Social Security, workers’ compensation, and unemployment insurance.

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