According to a report from Reuters, a federal judge in San Francisco has ruled that Uber Technologies’s treatment of drivers as independent contractors rather than employees could significantly harm competition and may violate California antitrust law.
Bloomberg Law reported that Judge Edward Chen of the US District Court for the Northern District of California, who is currently hearing a case brought against Uber by Los Angeles-based Diva Limousine, also ruled that Uber’s business model, as it pertains to drivers, could harm its competitors. In court, Diva’s lawyers argued that alleged misclassification of drivers could save the company as much as US$500 million annually in California alone.
In 2018, the California Supreme Court made a ruling making it more difficult for companies to classify workers as independent contractors. It also named misclassification of employment as a type of unfair competition.
However, Chen’s ruling is not a final decision in this case. The judge dismissed one of Diva’s complaints against Uber due to jurisdictional issues and other legal arguments.