Uber is being looked at as the benchmark for all thngs good, bad and ugly in the On-Demand Economy. Lots of articles are being written about Independent Contractors not being treated as full time employees. Recently, I learned about a clause Uber added in their agreement’s with drivers. It states drivers can’t take legal action and instead need to settle all disputes through arbitration. The company claims they can’t be sued because of this.
[Note for Freelancers: Uber’s contract says disputes would be resolved by Jams, a Boston based mediation group. Below is a high level overview of the procedures. So, please review them, if you plan on working for an Uber company for a while]
A San Francisco District Court Judge is not buying this and recently granted class-action status to a law suit by two Uber drivers. Depending on how things go, 150K other drivers might join the suit — and they will probably be followed by other independent contractors who will sue other On-Demand companies.
Other On-Demand companies are being taken to court. GrubHub, DoorDash and Caviar were hit was lawsuits last week. The charge is that these firms did not classify workers as independent contractors while treating them as employees. Workers must pay for expenses like gas, parking fees and phone data, which would be illegal under California law if they were classified as employees.
All of this has put the fear of good into these companies. In fact, I had lunch today with a friend who has his own 10 person agency and he even said he is rethinking the status of his current 1099ers.
The Uber case is really the big elephant in the room, on the streets and in our economy. It will indicate if 1099ers can sue their employers. For now, the lawyers and lobbyists (Ubers) will battle it out.