Uber Rideshare Lawsuit (2024 Update) – Forbes Advisor – Technologist

Uber is a rideshare company. But what exactly does that mean?

The exact origins of rideshare companies are a bit murky. Uber first appeared in California in 2009 under the name UberCab. Originally, it was only available in San Francisco, offering roughly the same services that it offers today. In 2011, the company changed its name to Uber, and by 2013, it was serving 35 cities.

During those years, other rideshare companies were formed in the U.S. and other countries. The year 2012, in particular, was a big year for new rideshare companies, seeing the creation of Lyft, Grab and Didi.

While every rideshare company uses slightly different technology and has slightly different policies, the basic concept is pretty much the same for every company. Rideshare companies facilitate a process that allows a person with a vehicle to give a ride to a person seeking transportation. The person seeking transportation pays the driver for this service and the rideshare company for facilitating the connection.

Uber drivers can be anyone with a car who meets the qualifications that Uber places on its affiliated drivers. These qualifications include things like having a clean driving record and owning or leasing a car that meets certain specifications (typically undamaged, four-door and relatively new).

Uber passengers must sign up for the service and download the Uber app to a device that will run it (usually either a smartphone or a tablet). There are fewer limits on who can be an Uber passenger. However, individuals can be restricted if they violate the terms of service.

There is more than one lawsuit against Uber and other rideshare companies. Uber has been subject to several lawsuits in America and in other countries where it operates. While this guide primarily focuses on U.S. lawsuits, the following are just some examples of Uber rideshare lawsuits that have been filed in other countries:

• Racial discrimination in the U.K. A lawsuit in the U.K. was filed based on the facial recognition system used by Uber.
• Employment designation in the U.K. The U.K. Supreme Court ruled that drivers are not self-employed.
• Unfair competition in France. Taxi companies allege Uber isn’t obeying French labor laws.
• Company classification in Europe. The European Union’s top court ruled that the company is a transportation company and not an information company and can be regulated.
• Automated firing in the Netherlands. This Uber rideshare lawsuit is brought by British drivers in the Netherlands who object to getting fired by an automated system.

Some U.S. lawsuits have been filed for similar reasons, while there are others that are mostly unique to the U.S. While there may be some smaller Uber lawsuits working their way through the legal system at state or local levels, the following are the most significant lawsuits filed against Uber in the U.S.

• Sexual assault cases throughout the United States. The most publicized Uber rideshare lawsuits might be sexual assault claims by passengers. In hundreds of lawsuits, passengers claim that Uber policies are directly responsible for passengers getting sexually assaulted.
• Illegal withholdings and violation of labor laws in New York. New York claimed that Uber was improperly withholding sales tax from drivers in the city. The city also claimed that Uber was not providing mandatory sick leave, minimum pay, and other benefits as stipulated by state labor laws.
• Violation of disability rights under Title III of the ADA throughout the U.S. The U.S. government claimed that Uber was illegally charging people with disabilities extra fees because they were taking more than two minutes to get into the vehicles.
• Antitrust class action lawsuit in California. California drivers claim that Uber and Lyft are engaging in illegal price manipulation because they set the price for rides. According to California law, that is allowed if drivers are employees but not if they are independent contractors.

Some of these lawsuits have already been settled, while others are ongoing.

Uber has faced over 170 lawsuits in the U.S. since it formed in 2009. While many lawsuits are still ongoing, several have also been settled. The following are examples of settled Uber lawsuits.

Safe Ride Fee in California

In 2016, Uber agreed to pay $10 million for false marketing. Until then, it had been charging a $1 safe ride fee, claiming it used the most advanced background checks available.

Prosecutors in California proved the screening tests were inferior to the background checks taxi drivers undergo. In addition to the $10 million, Uber agreed to change its policies and marketing.

Safety Complaints (Class Action)

Uber paid $28.5 million to settle two class action claims in 2016 that involved similar concerns. The primary complaint was that Uber was misleading consumers about its safety in its marketing.

Failure to Report Data in California

Uber paid another $7 million for failing to report operational data required by the state. This data included information about disability accommodations and driving accident statistics.

Driver Misclassification in Alaska

The state alleged that Uber was not paying unemployment insurance, workers’ compensation premiums or taxes because it misclassified drivers. Uber paid almost $80,000 in the settlement and no longer has services in Anchorage.

Illegal Withholding in New York

In November 2023, Uber agreed to a landmark settlement after being sued by New York. It agreed to pay $290 million into a fund distributed to current and former New York drivers. These funds will reimburse drivers for benefits they never received and for sales taxes that were improperly withheld from their pay.

This settlement is meaningful in two ways. It is one of the largest settlements to date that the company has agreed to, and it will force the company to obey New York labor laws in the future.

Disability Regulation Violations Throughout the U.S.

Uber agreed to another multi-million dollar settlement in November 2021. It acknowledged that its wait time fees were discriminatory when applied to people with disabilities or others traveling with people with disabilities.

The money from the settlement went to pay over 65,000 Uber riders who were illegally charged these fees. Additionally, Uber agreed to change its policies to prevent further violations of these regulations.

How Uber responds to lawsuits depends on the lawsuit. It has settled many lawsuits, though in several of those lawsuits, the company has not acknowledged it was in the wrong as part of the lawsuit. In other cases, like the disability lawsuit filed by the U.S. government, it has agreed to adjust policies to prevent future Uber rideshare lawsuits.

However, not all cases have been resolved, and Uber isn’t always willing to settle. For example, in the sexual assault lawsuits, Uber has fought to prevent the cases from being consolidated. Under the terms of use that all passengers agree to, sexual assault lawsuits against Uber can’t be filed as a class action lawsuit.

Similarly, Uber has fought against every attempt to classify drivers as employees. When it lost a case in Alaska regarding that issue, it ceased operations in Anchorage. It continues to fight that classification in California.

One of the most important recent developments in Uber rideshare lawsuits involves the multiple sexual assault claims that have been filed against Uber. In October 2023, Federal Judge Charles Breyer in the Northern District of California ruled that approximately 80 cases can be combined in multidistrict litigation (MDL).

While the cases will each be tried separately in their respective states, all pretrial motions, depositions, and discovery will occur before Judge Breyer. This will make it easier for litigants to move their cases to trial. It also means that if one case is successful, other similar cases are likely to succeed at trial.

The other significant development happened in 2023 when a California appeals court upheld Proposition 22. This law allows Uber and other rideshare companies to designate their workers as independent contractors.

However, this ruling alone does not give Uber a win in this lawsuit. California claims that independent contractors have the right to set their own rates. Thus, as long as Uber claims drivers are independent contractors, they may violate price-fixing regulations.

Conversely, if Uber changes course and claims their drivers are employees, it would be guilty of not paying payroll taxes for the better decade.

If you want to file an Uber rideshare lawsuit, the first thing you should do is consult with an attorney. What type of attorney you would need to consult with depends on your claims.

For example, if you want to file a sexual assault claim against Uber, you would be best served by consulting with a personal injury lawyer, preferably one who handles multidistrict litigation.

Conversely, if you want to join the class action lawsuit in California, you must be an Uber or Lyft driver who works in California and who has opted out of the arbitration agreement.

These aren’t the only types of lawsuits you might want to file. Most Uber rideshare lawsuits will either fall under the auspices of labor law or personal injury law. These are the types of lawyers you should consult with before attempting to file a lawsuit.

The sexual assault lawsuit that has been consolidated into multidistrict litigation can only be joined by passengers who were sexually assaulted before, during or after an Uber ride. If you aren’t a passenger or weren’t sexually assaulted, you can’t join that lawsuit.

Drivers who were sexually assaulted could conceivably file a lawsuit as well but would not be able to join that one. Similarly, both passengers and drivers who were assaulted in other ways could also potentially sue Uber or Lyft. Those lawsuits would also be independent.

So far, tens of thousands of people have received compensation from rideshare lawsuits. As previously noted, for example, 65,000 individuals were compensated in the disability lawsuit against Uber that was filed by the U.S. government. Many thousands were also compensated by the New York lawsuit. Some individuals have also received compensation in smaller lawsuits.

Unfortunately, compensation may not be equivalent to the damages suffered by the litigant. For example, in the New York lawsuit, $290 million was placed into an account for wronged Uber drivers.

However, more than 100,000 drivers were eligible for this compensation, which means the average driver got a little under $3,000. Some of those drivers calculated that Uber stole as much as $25,000 from them with their illegal activities.

If you have an active lawsuit against Uber or Lyft, you shouldn’t expect settlement money anytime soon. Pre-trial motions, depositions and discovery for the sexual assault case have only just begun. It is not uncommon for an MDL to take years before the first trial occurs.

Even once individual trials begin, it could be many more years before the first verdict is issued. The first case likely won’t begin until at least 2025, and a verdict probably won’t be issued until at least 2026.

Assuming the first case is decided for the litigant, though, Uber will likely begin to settle with other litigants promptly after that. You probably shouldn’t expect to see any money for at least a few years, although a lawyer can advise you more precisely.

The antitrust litigation in California is even more uncertain. While California presents a strong case, Uber has successfully used legislation to fight California regulation and may do so again.

Uber has consistently fought to maintain control of its pricing and to classify drivers as independent contractors. The company is not likely to give ground on either point. This is one lawsuit that could continue for years or even decades.

If you file an independent lawsuit, that may be your best chance at seeing settlement money quickly. Uber has previously settled when it isn’t required to admit guilt and likely would if the lawsuit isn’t precedent-setting.

The potential biggest impact on the ride-sharing industry likely comes from the California antitrust lawsuit. If a California court rules that preventing drivers from setting their own prices is anti-competitive price fixing, other states would likely pounce on that ruling to act against the ridesharing industry.

Alternatively, if Uber or Lyft did an about-face and agreed that drivers were employees, that decision would also probably change the industry since it isn’t likely that a rideshare company would claim drivers were employees in one state and independent contractors in another. That would be a recipe for future lawsuits.

The sexual assault lawsuit is likely to have less impact. Even if the litigants win, it would probably only result in Uber or Lyft changing policies. For example, they might require dashcams in all vehicles or implement even stricter background checks.

Uber has changed its background check policies before, when placed under government scrutiny. It would probably be willing to do so again to avoid lawsuits.

Uber is currently the 95th most valuable company in the world, with a market cap of $144.18 billion. This means that even settlements like the New York one that cost it nearly $300 million represent only a fraction of a percent of its value.

Uber can easily afford to settle all but the most significant lawsuits. So far, it has pretty freely settled any case that wouldn’t destroy its core business concept. Based on its history, it seems that Uber treats lawsuits as annoyances, typically agreeing to the smallest possible changes in policy to avoid future lawsuits.