Uber, Lyft face landmark trials that could change their business

Uber on phoneFrom CNET — James Martin writes about the recent federal court rulings this week that said that juries will decide whether drivers for Uber and Lyft are employees or independent contractors.  The business model for both companies may have to change depending on the outcome.  He writes:

“Drivers for ride-hailing companies Uber and Lyft will get their day in court, two federal judges in San Francisco ruled Wednesday. The companies are both facing suits from drivers who want to be classified as employees, rather than independent contractors.US District judges Vince Chhabria and Edward Chen each denied requests from the firms for summary judgment of the cases and said juries will decide how Uber and Lyft will classify and compensate drivers.A change in worker classification from contractor to employee could dramatically increase the operating costs for both companies — forcing them to handle taxes and Social Security, pay health insurance and other benefits, and reimburse expenses like gas and maintenance. As independent contractors, Uber and Lyft drivers currently handle those costs themselves.Drivers for both companies are seeking class-action status in San Francisco Federal Court, and though the outcome of both lawsuits would affect only drivers in California, the results would set a precedent for other jurisdictions.Uber and Lyft, which make apps that help people looking for a ride connect with drivers piloting their own vehicles, say people can make extra cash as drivers by being their own boss and driving as much or as little as they want….”

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