Class-Action Lawsuit Against Uber Threatens To Force Sharing Economy Platforms To Regress

When thousands of Uber drivers this week filed a class-action lawsuit against ride-sharing app Uber for better, more traditional working conditions, the sharing economy suffered yet another blow to its unique modes of operation. The class-action lawsuit against Uber threatens to force sharing economy platforms to regress to the traditional business structures that were so readily abandoned in favor of the more democratized, less institutionalized ones offered by sharing economy giants Uber and AirBnB.

A group from California and Massachusetts spearheaded the lobbying against their Uber in recent months, resulting in a settlement in their favor that is likely to see similar suits launched across the country. On Sunday, Uber drivers from Illinois and Florida filed the latest class-action lawsuit with the US District Court for the Northern District of Illinois.

The Uber lawsuit revolves around changing the way that Uber works: how people are employed, what they are entitled to, how legal issues are regulated, and how the safety of “employees” and users is ensured. While these changes do not sound threatening, it is in this way that the class-action lawsuit against Uber threatens to force sharing economy platforms to regress to traditional service provision structures.

In this case, the Uber lawsuit aimed most strongly to force Uber to grant “Employee” status to its drivers rather than hiring them as “Contractors,” reports CNet.

“This reclassification would see drivers entitled to sick leave, overtime, social security, health insurance and a minimum wage,” said C-Net of the class-action lawsuit.”The Massachusetts and California settlement saw Uber paying out $100 million to the 385,000 plaintiffs. It also means Uber is unable to fire drivers at-will, among other concessions. However, Uber did not have to reclassify its drivers as employees.”

Uber was not forced to reclassify its drivers as employees in this lawsuit, but any class-action lawsuit against Uber still threatens to force sharing economy platforms to regress to the dated business structures that were jilted in their favor over the past two years, such as taxi franchises and hotel chains.

The new Uber lawsuit goes one step further than that filed by its California and Massachusetts drivers by seeking to recoup tips earned by individual drivers but not received because they were “earned but stolen by Uber, or were lost due to [Uber’s] communications and policies,” according to the LA Times.

The class-action lawsuit against Uber threatens to force sharing economy platforms other than Uber to regress, too: a widespread backlash against casual sub-letting platform Airbnb has seen the platform banned in Berlin, reports The Independent.

“Berlin has banned tourists from renting entire apartments through Airbnb and its competitors in an attempt to protect affordable housing,” reports The Independent.

“With the help of large fines, the German city’s authorities are hoping to protect the property supply and keep rents as low as possible… from 1 May, the new law entitled Zweckentfremdungsverbot bans the short-term let of entire apartments to tourists without a city permit.”

Airbnb is a home-sharing platform, just as Uber is a ride-sharing platform. Backlash over these two giants of the sharing economy share many commonalities, but one in particular: anger and distress over the disenfranchisement of employees of service providers that previously monopolized the personal transport and accommodation markets.

Uber made a statement by email on Monday about the class-action lawsuit.

“Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss. As employees, drivers would have set shifts, earn a fixed hourly wage, and lose the ability to drive with other ridesharing apps — as well as the personal flexibility they most value,” reads the statement from Uber.

Whether or not the continuing launches of class-action lawsuits against Uber threaten to force sharing economy platforms to regress — strangling both Uber and Airbnb out of operation in their profiteering peak — is yet to be decided.

[Photo by Spencer Platt/Getty Images]