Uber Lawsuits in California – The 4 Most Common

Posted on March 13, 2023

In California, Uber is facing 4 different types of lawsuit claims:

1. liability for car accidents caused by its drivers,
2. claims that Uber drivers sexually assaulted passengers,
3. individual labor claims by drivers, and
4. a class action over Uber’s misclassification of its drivers as independent contractors.

Some demand compensation for personal injuries. Others demand compensation for Uber’s improper treatment of its workers.

What lawsuits is Uber facing in California?

Uber is facing hundreds of lawsuits in California, alone. Most of them, though, fall into 4 categories:

1. personal injury lawsuits by victims of car accidents caused by an Uber driver,
2. personal injury lawsuits by passengers who claim that an Uber driver sexually assaulted them,
3. labor law claims by Uber drivers who claim that the company owes them back wages, and
4. a class action against Uber for misclassifying its drivers as independent contractors, rather than as employees.

1. Car accident liability

Uber and other ridesharing companies, like Lyft, face lawsuits for car accidents caused by their drivers on an ongoing basis. These lawsuits include:

• bicyclists and pedestrians who were hit and hurt by Uber drivers,
• motorists who were in a car crash caused by an Uber driver, and
• passengers in an Uber vehicle who were hurt in a crash.

The plaintiffs in these lawsuits demand compensation for the victim’s legal damages, including:

• medical bills,
• lost wages and earning capacity,
• pain and suffering,
• emotional distress,
• loss of consortium, and
• property damage.

Rideshare car accident lawsuits like these aim to recover that compensation from:

• the negligent Uber driver,
• the Uber driver’s insurance company, and/or
• Uber’s insurance company.

Uber used to try to avoid liability for these crashes by claiming that their drivers were independent contractors, not employees. However, California’s Assembly Bill 5 went into effect on January 1, 2020. This new law made Uber reclassify their drivers as employees.¹ This made Uber vicariously liable for injuries caused by their negligence. It lets victims seek compensation for their injuries from Uber’s insurance coverage.

However, since the passage of Assembly Bill 5, other changes to California’s gig worker law have complicated the picture. Proposition 22 let Uber classify workers as independent contractors, again, which is more in line with Uber’s business model. In a big victory for Uber and Lyft, the California Courts of Appeal overturned an earlier Alameda County Superior Court ruling that Prop 22 was unconstitutional.

The state of the law can depend on the time when the victim was hurt. A California employment or personal injury attorney can help.

2. Sexual assaults by Uber drivers

Uber and other ridesharing companies are also facing lawsuits in California for sexual assaults committed by their drivers. These lawsuits argue that Uber should be held responsible and liable for negligently hiring the driver.

The misconduct, both sexual and otherwise, of Uber drivers has included:

• sexual battery (Penal Code 243.4 PC),
• rape (Penal Code 261 PC),
• assault and battery,
• false imprisonment (Penal Code 236 PC), and
• attempted kidnapping (Penal Code 207 PC).²

These lawsuits try to hold Uber liable for not adequately vetting its drivers. In California, Uber can only hire drivers who:

• have had a driver’s license for at least a year,
• have adequate car insurance,
• drive a registered vehicle that has at least 4 doors,
• pass an annual criminal background check, and
• pass a 19-point vehicle inspection every year, or every 50,000 miles driven.

The background check that Uber uses, though, is not as reliable as the FBI law enforcement background checks that use

• fingerprints and
• the Live Scan system.

Instead, Uber uses a third-party background check that is faster and less expensive. This lets Uber save money and get drivers on the road more quickly.

That poor screening process puts Uber passengers at risk. Lawsuits allege that Uber’s poor hiring practices could have prevented their injuries at the hands of their driver. The lawsuits claim that Uber’s negligence in hiring these drivers makes the company liable for their injuries. In 2016, Uber settled a lawsuit that claimed that its background check failed to screen 25 drivers who had serious criminal convictions in their past, including for murder and kidnapping.³

The lawsuits also claim that Uber’s marketing puts its passengers, especially its female passengers, in danger. Uber has long touted itself as a safe alternative to driving under the influence (DUI). This encourages people to use Uber when they are too intoxicated to drive. However, inebriated passengers are less able to fend for themselves, and are more vulnerable to the sexual assaults of their drivers.

Many of these sexual assault claims are demanding that punitive damages be assessed against Uber for its poor conduct and the horrific consequences it caused.

3. Individual labor claims by drivers

Many of Uber’s own drivers are also suing the company in individual worker misclassification lawsuits. These wage and hour lawsuits demand back wages and other benefits that the driver should have received, had he or she been correcting classified as an employee in California.

In California, an independent contractor has always been someone who performs a service for another, so long as the worker:

• is promised a specific payment for a specific result, and
• retains control over how the task is performed.⁴

The details about worker classification have changed rapidly in recent years, in large part due to the rise of the gig economy and ridesharing companies like Uber.

In 2018, the California Supreme Court elaborated on these requirements by adopting the so-called “ABC test.” The test, which is used in lots of other states, like New York, begins by presuming that the worker is an employee. The employer can overcome this presumption by showing that:

• both under the contract and in practice, the worker is free from the control and the direction of the employer’s business when it comes to the performance of the work,
• the work being performed is outside the usual course of the employer’s business, and
• the worker is customarily engaged in an independently-established occupation of the same nature of the work being performed.⁵

The test gets its name from its simple, streamlined, 3-part framework.

Uber has long claimed that it is not a transportation company. Instead, it says that it is an app that connects people who want a lift to drivers willing to give one.⁶ This argument has allowed it to claim that the drivers were independent contractors, rather than employees, because driving was outside the usual course of Uber’s business.

This argument, and the widespread use of ridesharing companies in California, has led to rapid changes in the state’s labor laws.

In September 2019, the California Legislature passed Assembly Bill 5, which codified the state supreme court’s ABC test for independent contractors.

In September 2020, the legislature passed Assembly Bill 2257, which exempted certain types of workers from the ABC test.

In November 2020, California voters passed Proposition 22. Uber and similar companies lobbied heavily for the passage of the ballot measure. The Proposition lets app-based ride-hailing and delivery companies, like Uber and DoorDash, classify their drivers and delivery personnel as independent contractors. In a compromise, Proposition 22 requires these companies to provide additional benefits and protections, like:

• reimbursement of expenses on a per-mile basis,
• limited minimum wage protections,
• compensation for drivers who were hurt while on the job,
• prohibitions against workplace discrimination, and
• a health insurance stipend for frequent drivers.⁷

On August 20, 2021, a superior court judge ruled Proposition 22 unconstitutional. The lawsuit was backed by the Service Employees International Union (SEIU) and SEIU California. The court ruling hinged on how the ballot initiative infringes on the legislature’s ability to govern and to create a workers’ compensation system under California Labor law and the state constitution. However, the California Courts of Appeal just overturned the superior court ruling.⁸ Given the significance of the outcome, the lawsuit will likely go to the state supreme court.

Whether a worker is classified as an employee or as an independent contractor is significant. Independent contractors can be treated very differently from employees. For example, independent contractors are not entitled to:

• overtime pay,
• a minimum wage,
• paid meal and rest breaks,
• benefits from unemployment insurance, and
• sick leave.

Independent contractors also have to pay more taxes than employees, including:

• Social Security taxes, and
• Medicare taxes.

The paperwork for reporting income is also different for independent contractors. They use Form 1099, not W-2s.

Therefore, Uber and Lyft drivers who were wrongfully classified as independent contractors up to, and including, when the law was changing may be entitled to back pay. Uber is facing numerous such claims in California that have been filed by drivers acting individually.

4. Class action over misclassification of gig workers

Uber is also facing a worker misclassification lawsuit that was filed as a class action. In this case, drivers are demanding back pay for being misclassified as independent contractors. However, they joined together in an Uber class action lawsuit to pursue their claim against the company in district court.

The case began in 2014. It was settled out of court by Uber in 2019 for $20 million, though Uber continues to deny that the workers were misclassified.⁹

People who drove for Uber in California or Massachusetts between August 16, 2009 and February 28, 2019 can submit a claim for benefits in the case. However, to recover compensation:

• the driver must have validly opted out of Uber’s arbitration clause, or
• Uber must have no record of the driver accepting the arbitration agreement.

More recently on July 21, 2022, the U.S. District Court in the Northern District of California just approved a class action settlement where Uber paid $8.4 million to California drivers claiming they were misclassified as independent contractors.¹⁰

An employment lawyer can help workers understand their rights and work towards a class action settlement.

How does Prop 22 affect these lawsuits?

In California, Proposition 22 can affect all of these types of lawsuits against Uber. Because Proposition 22 changes whether ridesharing drivers are independent contractors or employees, it may subject Uber to vicarious liability for accidents caused by its drivers if the law is not in place. Prop 22 also dictates whether Uber can continue to classify its drivers as independent contractors in the future.

The uncertainty of the state of the law in the last year has made it difficult for workers of gig companies in California to understand their rights.

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