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Uber lawsuit could torpedo business as Clinton weighs in

15 July

Hillary Clinton appeared to raise doubts about the attractiveness of the jobs created by Uber and other companies in the sharing economy earlier this week, when she said that on-demand employment contracts raised "hard questions" about workplace protections.

Her campaign said yesterday that Clinton, who is seeking the Democratic nomination to run for president next year, was not picking a fight specifically with Uber. Instead, Reuters reports, the aide set that Uber's business model should lead to a debate about the likely consequences for its employees.

Her remarks echo those of Ed Miliband, who made zero-hours contracts, under which staff are expected to be available to work but are not guaranteed a job or an income, a central plank of his unsuccessful election campaign.

Uber is currently battling a lawsuit in California that could dramatically increase its employment costs, undermining a business based on the use of flexible, low-cost freelancers.

The taxi firm, which has provoked protests on both sides of the Atlantic – most recently in Paris – has asked a federal court in San Francisco not to treat the case as a class action suit, the Washington Post reports.

Uber says the complaints by three former drivers don't reflect the sentiment of its fleet of 160,000 past and current drivers in California.

The represent a tiny but growing number of former drivers who believe they are entitled to compensation, claiming they should have been categorised as employees, not independent contractors.

The ramifications of the case could be massive for Uber. Its business model defines drivers as contract workers. If they were redefined as employees, the company could be forced to offer health insurance and reimbursements for fuel and other costs, adding substantially to its running costs.

The stakes are also high for the wider "sharing-economy".  Companies such as TaskRabbit and Lyft use millions of freelance workers for jobs such as food delivery, legal writing and valet parking.

Such firms have been criticised for failing to provide benefits associated with long-term employment. However, the companies themselves say that their business model gives people more flexibility to pursue jobs at their convenience. 

The Federal District Court for the Northern District of California in San Francisco will hold a hearing on class-action classification in August.

 

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