Uber Drivers Advance in Bid for Expense Reimbursement

SAN FRANCISCO (CN) - A class of drivers suing Uber for tips and asking to be treated like employees can seek reimbursement for the biggest expenses of their jobs, a federal judge ruled Wednesday.

U.S. District Judge Edward said the class he certified this year, of people who drove for Uber since Aug. 16, 2009, can seek reimbursement for phone and vehicle-related costs.

Chen rejected Uber's argument that those expenses could not be adjudicated on a classwide basis, and that the lead plaintiffs were giving up too many other potentially valuable reimbursement claims just to recover the cost of gas, mileage, car maintenance and operating the Uber app.

"Plaintiffs have made a reasonable judgment call to pursue vehicle-related and phone expenses in this litigation, and have presented some evidence that these expenses will comprise the majority of any recoverable expenses," Chen said, pointing to six declarations showing that most of the Uber drivers' expenses are vehicle-related.

"While this is admittedly a small sampling that lacks statistical significance, the Court finds that it is sufficient where, as here, it seems self-evident that vehicle-related and phone expenses will likely comprise the majority of any recoverable expenses from performing a transportation service and Uber has presented no persuasive evidence to the contrary."

Chen also certified a subclass of drivers who neglected to opt out of the arbitration agreement in Uber's electronic contract, finding it unenforceable because it contains a non-severable provision barring employees from acting as state representatives in labor lawsuits under California's Private Attorney General Act.

"This is a significant ruling and we are very pleased," class attorney Shannon Liss-Riodan said. "This ruling will allow far more Uber drivers to participate in this case."

Siding with the class, Chen said Private Attorney General Act (PAGA) waivers are unenforceable as a matter of public policy. He cited Sakkab v. Luxottica Retail North America, in which the Ninth Circuit held that a man suing Lenscrafters for wage and hour violations did not have to waive his rights under PAGA, and the California Supreme Court rule from Iskanian v. CLS Transportation Los Angeles, LLC that PAGA waivers are unenforceable.

"Although the arbitration agreement contains an opt-out provision, the arbitration agreement still requires that the driver sign a pre-dispute PAGA waiver, which is contrary to Iskanian," Chen wrote.

He refused to sever that part of the arbitration agreement, as Uber attorney Theodore Boutrous asked, saying the PAGA waiver and non-severability clause "are so inextricably linked, it is impossible to grammatically or linguistically sever the PAGA claims waiver without completely undermining arbitration itself."

Uber defended itself in a statement: "Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss. Drivers use Uber on their own terms; they control their use of the app along with where and when they drive. As employees, drivers would lose the personal flexibility they value most - they would have set shifts, earn a fixed hourly wage, and be unable to use other ridesharing apps. We will appeal the district court's decision immediately."

Chen, however, refused to expand the class to include drivers who drove for Uber under corporate names or through third-party transportation companies: "Plaintiffs provide no proof that they would define and determine who would fall into this category."

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