This is a transcript of Episode 27: An Interview With Shannon Liss-Riordan About The Uber Employee Misclassification Lawsuit. You can find show notes, comments and more by clicking here. You can also listen to the podcast in iTunes, Stitcher or wherever you get your podcasts.
Announcer: Welcome to The Rideshare Guy podcast, the site that’s dedicated to helping drivers earn more money by working smarter, not harder. So whether you drive for Lyft, Uber, Sidecar, or anything in between, we’ve got you covered. And now, here’s your host, Harry Campbell.
Harry: Hey, what’s going on everybody? I’m excited to be here and happy to bring you another episode of The Rideshare Guy podcast. I actually just got back from a quick trip down to Peru with my wife and it feels great to be back on American soil. Peru is a very cool place, but it always feels good to come home and relax and get back to work. So it was very, very nice. I spent…I did a five-day trek, actually, to Machu Picchu with my wife, and it was definitely awesome. Probably the coolest feeling, too, though is to go without internet for a whole week. So you might actually think that’s a bad thing, but for me it was a cool thing since I spend so much time at my computer and on my phone.
It was definitely nice to get away from it all and nothing bad happened or nothing broke or the world didn’t end while I wasn’t able to check my computer. So I think that’s a cool feeling. And it may be something that I might try again in the near future. Maybe a weekend getaway or something like that where I just untap from my phone and really just focus on me and relaxing and hanging out. I think that’s important regardless of what you guys do out there. So definitely good trip and had a lot of fun with my wife. She was on break from school so that’s why we took the trip. And it was also nice because I was able to really pre-schedule all of my content, do a lot of upfront work, and then some catching up when I got back.
So you guys may have noticed that if you emailed me or left a comment last week, I wasn’t able to respond as quickly as I normally do. But now I’m back so definitely feel free to reach out to me if you have any questions or what to get anything clarified or anything like that. And I’ll also point out that, actually, while I was gone I had three of my top traffic days ever. So I think that on…I think Tuesday or Wednesday, just randomly, just my site was doing really well and had a bunch of traffic. And I think it was the most that I’ve ever had in a single day. And then the next day was the most I’ve ever had in single day. And I actually had Christian, one of my writers, who did a really great job while I was gone, he posted an article on Uber driver deactivations. This, I would almost say, a little mini scandal that happened while I was away.
And I saw that it happened right before I left but I didn’t get a chance to post about it. So I’ll definitely leave a link in the show notes if you guys want to read that article. That article, I think, got over 10,000 page views in just the first day or two, so that was pretty cool to see that article do so well. And also kudos to Christian for picking up the slack while I was gone. But yeah, it’s a good feeling in general to be able to build a business that you can maintain while you’re gone. And obviously, I was still making a little bit of money from my site while I’m gone. And I still have ads running and all of that good stuff. So, enough about my trip.
Today on the podcast we’re going to be talking about an issue that has really been all over the news lately, right. And I’d say probably the biggest stories you might have seen on whether it’s Huffington Post or Buzzfeed or Forbes. It’s pretty much everywhere. And it’ll likely be in the news for the next few months, or probably even years to come. And I know there are a lot of strong opinions on this subject and drivers are somewhat divided, but there’s also a lot of misinformation and uncertainty around this lawsuit, this Uber misclassification lawsuit. And that’s really what I wanted to clear up with today’s interview, because the law is confusing.
If you guys have ever had to deal with a lawyer, if you’ve ever needed a contract reviewed or anything like that, before you know it you owe $1000 and you still don’t really understand what just happened. And I really figured that there’d be no better person to bring on than the lawyer handling the case for the plaintiffs. And I actually met her on a Huffington Post digital round table, which is a little video interview that we all did, and got to know her a little. And reached out to Shannon Liss-Riordan and she agreed to come on the podcast. So I’m definitely appreciative for that.
And if you guys have no idea what I’m talking about there’s actually currently a lawsuit in California that is being brought against Uber by three divers. And now it’s actually more than three drivers, but it’s about the misclassification of Uber drivers. And as you guys know, Uber uses this…or maybe you don’t know, but Uber uses this independent contractor model, right, which generally if you work for any type of big company you’re an employee. If you go out in my old job at Boeing, I was an employee, but then now with Uber what they do, and all of these on demand companies, basically hire independent contractors. And there’s a lot of disagreement over whether drivers are actual independent contractors or not.
And I see people saying, “Hey, it’s so clear that they are,” and other people say, “It’s so clear that they aren’t.” And to me, what is clear is that it’s not clear. And the law, the IRS uses a 20 factor test. And if you go down the list, you’ll see this one aspect says that, “Oh, yeah drivers sound like employees. Oh, this other aspect, though, sounds like maybe they’re not employees. So it’s really not clear to me and I would argue with anyone who says it’s clear cut one way or the other. To me, what is clear is that it isn’t clear. So hopefully that’s not too confusing. But if you guys are drivers out there, you know that some aspects Uber does control. Your acceptance rate, right? You have to maintain a certain acceptance rate. That sounds like control to me.
What rating you need. If you fall below a certain rating, 4.6, 4.7, you’re deactivated from the platform. That sounds like control. The rates that you can charge. That sounds like a huge aspect of control, right? If I can’t set my own rates, I don’t know too many independent contractors who would go out and say, “Hey, I’ll do this job for you but you tell me how much you want to charge.” Right? And then also where rides will go. So there’s all these factors that are clearly Uber exerts a lot of control. But at the same time, there’s also a lot that drivers are in control of, right? When you work. I can’t think of any job that says, “Hey, you can go log on right now. You can log off right now. You can take as long of a lunch break as you want. You can take as short of a lunch break as you want.” So and then also where you start working, right?
So you can go start from your home. You can go pick a certain area that you want. So there really are all these different aspects that I think some fall under employee and some clearly don’t. So I think that’s definitely something to keep in mind. And the one thing that I really want to hammer home is that unfortunately, what drivers what, what I want, and what you want in this situation may have no real bearing on this case. Now, Uber has actually gone out, and we’ll talk about this in the interview, and they’ve really touted drivers want this, they love the flexibility, they want to be independent contractors.
Unfortunately, though, the law does not care about what drivers want. It doesn’t care if you want to work. Let’s say you are out there and you want to go to McDonald’s and work for less than minimum wage. McDonald’s is going to offer you $8 an hour. You say, “No, I’ll take $5 an hour.” Right? You can’t do that. There are laws in this country that prevent you from doing that. And so I think that’s really the thing to keep in mind. And I’ll definitely give some more thoughts, and I did ask Shannon about this on the podcast, so it’s definitely a really informative interview and I’m really appreciative to her for her time, because I know that she’s very busy with many ongoing cases. And I think that this is really going to be able to clear up or at least give you guys the information straight from the source so that you can make your most informed decision.
I’m not going to tell you guys which way you should go, what you should think, or anything like that. So definitely look forward to that. And before we get on the show, too, I want to thank everyone who emailed about the last podcast on how to make money with a blog. So I’ll leave a link in the show notes, but if you guys haven’t listened to Episode 26 yet, I’d definitely recommend it. I got a ton of great feedback from everyone just saying thanks and just, in general, they thought it was very interesting that I was so open and revealing. And for me, I just wanted to record that podcast because I do believe in a lot of transparency and also just because I think it’s a really interesting topic. Now, if you guys haven’t listened yet, basically I went through all the way that I’m making money, what sources, what advertisers, and everything.
So it was a lot of fun to record and people always ask me how I make money with a blog, so it was fun to answer that question. And a lot of the follow-up questions that I got from readers were basically how they can support the site. So if you’re wondering out there how you can support the site, what I’m doing, and everything, and obviously you guys know that now, at this point, this is my full-time job to be a blogger, to produce one podcast every two weeks, four articles a week, two YouTube videos every single week. So we have a ton of content. We’re doing a ton of new resources and everything out there every day.
And to be honest, if you’re interested in supporting the site, supporting me, it’s pretty simple. I actually make it really easy to do so by partnering with companies that make a lot of sense for drivers. So you guys know that I’ve been talking about Stride Health recently. And for me, they’re one of my partners. And they’re really a no brainer in my opinion. The thing that I really try to do is find these companies that not only provide value to myself, but also provide value to you guys. Because when they approached me to advertise on this site, I took a look at Stride. I said, “Hey, all right. I’m going to start playing around with their site.” And I say, “Hey, this is exactly what I need. And not only is it exactly what I need, it’s also what you guys, as drivers, need.”
Independent workers in general, anyone who’s out there freelancing, who’s out there on their own, there’s all these services that you’re used to getting with a traditional job and now you don’t get them. And to be honest, I’m just like you. I’m cheap. I like getting stuff for free. And that was the first thing that stood out to me, was Stride Health, right? They’re 100% free and they’re going to help with something that I don’t like doing. I don’t like dealing with doctors, figuring out pharmacy, all those codes and numbers and all that stuff. It’s confusing, right? And I would much rather do other things with my life.
And I think that maybe, at first, I would say, “Hey, this sounds a little too good to be true. How are they free? How could this service offer help and on-call support and all that good stuff for free?” And once I started talking to them, I figured it out. Here’s how they’re free. So I’ll explain it to you guys quickly. Basically, let’s say you need healthcare and you’re in California. You can go to Covered California, which is the Obamacare website, the ACA website, and you have to figure everything out for yourself, buy a plan, compare everything. But the thing is, the price that you pay there, through Covered California, going straight to the source, is the exact same price as what you’d pay with Stride.
And when you go through Stride to buy a plan, so if you guys go to Stride Health and you buy a plan with them, it’s going to be the exact same plan but they’ll receive a broker’s commission. So it actually is a no brainer, right, to go through a company like Stride, one of these brokers. Because either way, you’re going to pay the same amount, but if you go through Stride, they’re going to do all the legwork for you. So for me it’s a no brainer. And this is a typical practice with life insurance, real estate. If you go and buy a life insurance policy, you can go to all these different carriers and their fees are basically built into the product. So it really makes sense to go and take advantage. If you guys have ever bought a house, you know that you have to use a realtor, because you’re going to be paying that realtor fee no matter what.
So I always think it’s important to know how people are compensated since that way you know what their incentives are. That’s why I recorded my last podcast. I wanted you guys to know how I’m compensated so how you can, basically, have all the information. So if you guys want to go and sign up for Stride Health, definitely head to stridehealth.com/rideshareguy. I’ll leave a link in the show notes. You guys can check that out and more. And if you want to take a look at the show notes, I have show notes of every episode, and transcripts for this episode, Episode 27. Head to therideshareguy.com/episode27.
Make sure you stay tuned to the end, too, because I’m actually going to tell you guys what my opinion is on the whole W-2 versus independent contractor issue. What do I think? Would drivers be better off as employees or independent contractors? And my thoughts have honestly changed a lot. As I’ve gotten new information, I’ve changed my mind and I’ve updated this and updated that. So what I think is I’m not saying you guys have to listen to it, but if you guys are curious, definitely stay tuned to the end. During the interview, I tried to stay pretty objective. Basically, just ask questions that I think drivers really want to know, that you guys really want to know. And I’ll give my thoughts afterwards. So without further ado, let’s get started with the interview.
Hey, Shannon. How are you doing today?
Shannon: I’m good. How are you?
Harry: I’m doing well. Just got back from vacation and getting back to the grind.
Shannon: Good. Well, welcome back.
Harry: Thank you. So let’s hop right into the interview and maybe you could give us a quick background about who you are and what you do for all my listeners and readers out there who may not be familiar with your name.
Shannon: Sure thing. So my name is Shannon Liss-Riordan. I’m a labor employment attorney based in Boston. I represent workers in all types of…mostly wage an hour cases, with a special focus on independent contractor misclassification and also tipped employees. So our firm represents…we only represent workers. We don’t represent companies. We’ve represented workers in a number of different industries around the country that have raised these types of issues.
Harry: So you’re typically on the workers’…or it sounds like always on the workers’ side of these issues.
Shannon: Yes, that’s right.
Harry: Okay. And obviously, the reason why I wanted to bring you on is because there is this big Uber misclassification lawsuit right now that your firm is a part of. So maybe you could give a brief overview of the current Uber lawsuit that you guys are working on?
Shannon: Sure. Yeah, so the case is…the name of it is O’Connor versus Uber Technologies. It’s in federal court in San Francisco. In it, we are challenging Uber for misclassifying drivers as independent contractors rather than employees. And we’re making claims that Uber owes money to its drivers for this misclassification because of these wage violations. The case right now is focused on California drivers, but we’re hopeful that if we succeed in this case, we want to try to expand it back to cover Uber drivers across the country, which is how the case was originally filed. It’s what the judge originally said we could do, but he later limited the case to California drivers. So that’s what we’re focusing on right now.
Harry: Got you. That’s right. And so the most recent, I guess you would say, update on this case was this class action ruling. And can you…I think that’s probably what’s brought about a lot of confusion among drivers and who’s eligible. And I think that’ll be great to have you on to clear that up. So as far as the class act…the most recent class action ruling…first of all, what exactly does that mean and then what does it mean for drivers?
Shannon: Yes, I will do my best to try to clear that up. To be honest, it’s very confusing and we’re in the process of trying to clarify it and clear it up with the court because it’s not completely clear now who’s covered and who’s not covered. But here’s the basic gist of it. So a month ago, on September 1st, the federal court granted our motion for class certification so that the case now is a class action covering thousands of Uber drivers in California, but with a few big caveats. The judge, at least for now, excluded certain drivers from the class.
So the drivers who were excluded from the class, it doesn’t mean that they can’t participate in the case. It just may mean that they may need to contact us to get their names added individually. So we have hundreds of drivers who are contacting us now, and we’re making a list and we’re working on adding their names. But we’re hoping to work this out with the court so it’s not necessary to add on hundreds or even thousands of names of drivers individually.
But for right now, here’s what happened. There is an arbitration clause, which is one of these fine print legal clauses that companies stick into their contracts to try to prevent themselves from being held accountable for their legal violations for their whole workforce. So that’s exactly what Uber did here. So they stuck this arbitration clause in its contract with the drivers in order to try to prevent the drivers from being a part of a class action. And we’ve been having a lot of litigation in court over whether that’s enforceable and the scope of it, and there are a lot of issues.
But the way things stand right now, any drivers who have worked in California at any time since last June, June of 2014, as it stands right now, are not part of the case unless they contact us to join individually. The case only covers drivers whose work for Uber ended before June 2014. Now, we’re asking the judge to reconsider that because we think he made some errors in making that cutoff, but that’s the way things stand right now. And there are two other categories that got excluded under his ruling. One is drivers who drove in a name that’s not their own name. So for instance, some drivers incorporate and they’ve been paid by Uber through some corporate name that they’ve created.
So for now, those drivers are not included, again, unless they contact us. And the third category of drivers who were excluded were those who have driven for Uber through intermediary companies like transportation companies. Especially early on, I remember the Uber Black drivers were driving for a limo company and they had an Uber account, but they got paid through their limo company. So that is the other group that’s out for the time being.
Harry: Okay, no, I think that’s a pretty somewhat clear, about as clear as it can get. And I guess for drivers that are out there I think it makes a lot of…most drivers are going to fall into that category of Uber X drivers who are out there under their own name and who have actually started in the past, since June 2014 and didn’t opt out of the arbitration. So I’d say a lot of my audience and a lot of the typical Uber X drivers that you meet probably aren’t part of this lawsuit right now. They aren’t part of the class action. And it sounds like if they do want to be part of it, they need to contact your firm to ensure that they can get in and be a part of it. If they don’t, there is still the possibility that you guys could appeal and the judge could change that aspect, right?
Shannon: Yes, yes, that’s right. So for anyone who wants information about it and how to contact us, we set up a website where we tried to put all this information as clearly as we could.
Harry: I’ll definitely leave a link in the show notes to that.
Shannon: Okay, yeah. That’d be great. It’s uberlawsuit.com.
Shannon: We tried to make it simple.
Harry: Yeah, that’s definitely memorable. And just a couple quick follow-up questions, because I know that some of my audience has already been asking me about this. The two big issues I see with this, that drivers are really concerned about is…well first of all, there are obviously a lot of drivers in California, but there’s also a lot outside of California. And I know that in previous conversations, you’ve told me that, obviously, you guys are just filing this and it just applies to California drivers right now. But there are some national implications, I guess you would say. Can you talk about that? What should drivers outside of California know or what should they be worried about in regards to this lawsuit?
Shannon: Well, so like I said, we did originally file this as a national class action. We’re hoping that if we can succeed for the California drivers, we could expand it back to cover drivers across the country. So unfortunately, that’s going to have to wait a while, so people are going to need to be patient. The legal system just takes its time. We asked for permission to appeal that ruling that limited it to California, but the judge said no, we would have to wait until later on in the case.
Harry: Got you.
Shannon: And I really do think the judge made a mistake on that point, by limiting it to California. Because what had happened was Uber had, itself, decided to put in its contract with those drivers, a California choice of law provision saying if you have a dispute with us, we want California law to apply. So we used that and say, “Okay, great. Well drivers across the country have a dispute and they want to sue under California law.” And at first the judge said, “Yes, you can do that.” Then he thought about it again, a year later reversed himself on that. I think if the company makes a decision…Uber wrote the contract. Uber decided it wanted California law to apply. Then oops, later they get sued and realize, “We don’t really like California law.”
Why should they be able to get out of that? And the reason why California law is so significant to this lawsuit is because of this. The main damages that we’re seeking to recover for the drivers is reimbursement of expenses. That would mean getting paid back for all your gas, for all your wear and tear on your car, car maintenance, all of that. That’s the biggest source of money damages that we can recover. And California law is pretty unique in actually explicitly saying that employers must reimburse employees for expenses necessary to do the job.
So we’ve been getting calls from drivers around the country wanting to know, “What can we do?” in all these various states. And unfortunately, although I think Uber drivers very well may be misclassified under laws around the country, it’s harder to actually bring a case to get anything for them, to recover damages for them. Except California law has this expense reimbursement provision, which has allowed us to bring this case.
Harry: Yeah, and it does sound like maybe Uber’s lawyers made a mistake in this case because California does have some of the most employee friendly laws, right? So in that sense, that the potential damages would be a lot higher since you’re able to file in California as opposed to a different state?
Shannon: Yeah. Yes, and then they tried to backtrack from that once we tried to use that. Right.
Harry: And the last thing that I want to ask before moving on is one thing I’ve heard from drivers is…let’s be honest, as a driver it’s very easy to get deactivated. And I know that there are a lot of drivers out there who might be worried about potential retaliation. And I suspect that Uber can’t deactivate you just for joining in on this lawsuit or being part of the arbitration. But in reality, there really is a lot of uncertainty as far as drivers can really be deactivated for any little thing. So what would you tell drivers who are worried, basically, about retaliation from Uber for joining this lawsuit?
Shannon: Well, yeah. We have been getting that question a lot. And we get that question all the time in our area of practice, because we know people need their jobs. We completely understand that. The whole point of the class action is so that people don’t have to individually put their names on a case in order to get compensated for what’s owed to them. So what we do our best to reassure people that it would be illegal for Uber to retaliate against anyone. We have not heard of Uber specifically going out and deactivating people who have been involved in this case in some way. And in fact, a number of the drivers who’ve been actively involved in the case are still driving for Uber.
So they’re represented by lawyers. I think they would be careful about trying to do something that blatant. So we haven’t seen that as an issue, so I wouldn’t want drivers to be concerned that they’re going to get deactivated if they put their names on the case. We’ve had hundreds of drivers…we’ve had thousands of drivers from around the country contact us. And we have hundreds of drivers in California who have specifically contacted us since this court ruling in September and said that they want to have their names added to the case individually. So there’s also safety in numbers.
Uber’s not going to go around and deactivate all of these drivers. And there’s also…we also have another proceeding that we filed recently. We filed charges of unfair labor practices against Uber at the National Labor Relations Board. By using this arbitration clause to try to keep a lot of drivers out of the lawsuit, that’s a violation of the National Labor Relations Act. So we’re hoping we can get the Board involved, perhaps, to help us with this issue. But if there were concerns of Uber deactivating people for being involved, I think the Board would be helpful in that regard as well.
Harry: Okay, so that’s a really good update of what’s going on and the actions that drivers need to take right now. And just a couple questions. I think what a lot of drivers are curious about is the potential implications of this lawsuit. If Uber were to lose this lawsuit, what do you think would be the biggest differences for drivers? How would things be better or different or worse if Uber were to lose this lawsuit?
Shannon: Well, so what we’re seeking is a declaration that the drivers are employees and are entitled to all the protections that employees have. So specifically, in our case, we’re trying to recover the reimbursement for expenses and also the tips that Uber has advertised to the public, tips are included in the fare, so don’t worry about tipping your driver. But of course, as we know, drivers are not actually being given a tip. And so the judge certified that as part of the class action.
So if we get a ruling that Uber is employing the drivers, then the drivers should be entitled to those protections as well as there are a number of other protections that would likely come with it, such as a guarantee that you’re going to make at least minimum wage. Or overtime if you work more than 40 hours a week. And this is a huge issue for so many drivers we’ve talked to, if you lose your job you could get unemployment. If you get injured while you’re driving for Uber, you’d be eligible for Worker’s Comp.
So those are the kinds of things that would result from our winning a ruling that the drivers are employees. Now, Uber is trying to scare everyone to say that somehow, something about our case is challenging this flexible work setup that Uber has setup. And we’re not challenging that at all. Obviously, we know that a big reason why a lot of people like driving for Uber is the flexibility. You like setting your own hours. You like being able to log on or off whenever you want and not having a boss tell you when you have to work.
We’re not challenging that at all. We’re saying that the system as it is right now, that Uber drivers are employees and are entitled to basic wage protections that I’ve been talking about. So if we win the case, all we’re asking for is that drivers get these protections. That should not mean that you lose that flexibility. Uber is trying to scare everyone to day, “Oh, that flexibility would be gone,” but there’s no reason that flexibility would have to go away just because we win the case.
And of course, Uber is going to complain, “Oh, it would be so expensive for us to have to cover all these labor costs,” but come on. We all know Uber is a $50 billion company and I think if anyone can afford to cover their labor costs, Uber can afford. I don’t think this is going to threaten Uber’s existence.
Harry: No, and I definitely agree with you on that. And I would say that there’s no way this lawsuit or lawsuits like this would cripple Uber. But we have seen in the past, for example, with Homejoy, I know they recently went bankrupt and they were one of the companies that you were bringing a lawsuit against. And I know that there are multiple reasons why they folded, but one of the reasons they stated was because of lawsuits like this. So I guess my question is what do you think about the entire industry in that sense, that if this…the Ubers are likely going to be fine, but what about the smaller companies that are blaming, partially, their failure on lawsuits like this? What do you think of those companies and if they’ll fold because of this?
Shannon: Well, like you said, I think the Ubers of the world will do just fine. I think a lot of these companies will do just fine. If they’re on firm footing and they have a good business model and they’re providing the public with a service that the public wants to buy, I think they’re going to do just fine. I think there’s so many of these companies that have been popping up in recent years, that obviously they’re not all going to survive anyway, just because of the way the market works.
Shannon: And if we win these cases, and they have to cover labor costs too, will some of them not be able to make it? Perhaps, but I think that the companies that are taking on the responsibility of employers need to comply with the laws that we put in place for employers to comply with. And I don’t see why a successful business couldn’t structure its model so that it could make it work while ensuring the employees have all these basic protections. There are a lot of things they could restructure about it. They could even restructure their revenue model.
If it costs them a little more in overhead to cover some of these things, maybe that comes out of a higher percentage of the fare, but I think that would make it more transparent for everyone getting involved in this, what’s really going to be in their pocket at the end of the day. Because we’ve heard from so many drivers who get…frankly get lured into working for Uber based on promises that they’re going to make a certain amount of money.
They buy a car, they lease a car, Uber cuts their rate. They hadn’t really calculated how much it was going to cost in gas and all these other car maintenance expenses, and then they’re stuck. And I think if it were more transparent from the get go what is…what Uber is going to take, what’s going to be in the pocket of the drivers at the end of the day, I think it would make…it would lead to people having a better decision making option in front of them to decide if this is right for them or not.
Harry: Yeah, definitely. And I think that I…that’s one of the things I struggle with on my side is actually trying to figure out the best way to bring transparency to actual earnings. Because there is a lot of variability between pay and there’s huge variability between expenses. So I guess that makes a lot of sense. And there are drivers out there that are probably…since there is such high pay variability, there are a lot of drivers out there right now who are doing really well with this current model, with the independent contractor model. So what would you tell those drivers who want to remain independent contractors, who see this potential lawsuit maybe that with more transparency now they’re no longer at the top and they maybe come back down to the average? What would you tell those drivers who want to remain independent contractors?
Shannon: Well, again, I think that the drivers who are doing well, I don’t see why that would go away if they were declared employees rather than independent contractors. For the drivers who are already making well beyond minimum wage, they’re doing fine so nothing would have to change about that. What we’re talking about doing is trying to lift up everyone to a point where they’re being treated fairly under the wage laws. So again, I just don’t see why that would have to change anything with the drivers who are doing well. And I’m sure they’d love to have their expenses reimbursed on top of whatever else they’re doing. And maybe if it means that a bit of a higher portion of the fare goes to Uber, but they get their expenses reimbursed. It might just come out in the wash really.
Harry: Yeah, okay. And I guess my last question is just as far as a potential settlement from Uber, as far as a potential payout, this may be down the road, but what should drivers expect as far as are they going to receive a check for $4 in the mail at some point in the future or is it going to be a potentially larger or based on how much they drove or what?
Shannon: Yeah, no. I hope we’re not talking about [inaudible 00:31:55] drivers getting $4 check. And we’re very serious about the cases that we bring.
Harry: Yeah, that’s kind of a joke with a class action to poke holes.
Shannon: I know people have that perception of class actions, but we’ve gotten really fabulous settlements in our cases and people get real money out of the…we love sending out checks just out of the blue that no one knew they were entitled to where they get many thousands and even tens of thousands of dollars. That happens all the time from our firm. But to answer your questions, I really can’t predict at this time. I don’t know how long the case may take. Unfortunately, if Uber digs in its heels, it could take a very long time. So I’ve been encouraging everyone to be very patient. The legal system does take time.
And what the result might be at the end of the day? Obviously, just depends on how all this pans out in court. But what we are seeking is, like I said, the reimbursement for the expenses, the reimbursement for tips that haven’t been remitted to drivers, just as, by way of just comparison, that the driver who went to the California Labor Commissioner and got an order of reimbursing her for expenses, it was several thousand dollars for having worked a couple or a few months for Uber.
And that was based on the IRS reimbursement rate. So that’s basically what we’re looking for. But of course, if you had worked for Uber for a lot longer than that, you’d be looking at a lot more than that. And whenever we do resolve cases, hopefully, we’re in the position of having this discussion one day. But it gets distributed to people based on some formula, accounting for how long you’ve worked there, and what your potential damages would have been or would be in court, based on whatever the factors are that are looked at. So that might be the IRS reimbursement rate or it might be some other factors, but that’s all being sorted out still in the court.
Harry: And is your firm…do they take a typical class action cut out of the final payment? Is that how you guys are compensated or is there some other method? Because I think you guys are representing three drivers right now, is that right?
Shannon: Right. Well, the court has certified it as a class action so right now we’re representing however many thousands of drivers are actually covered by the class definition. So yes, we do this work on contingency so we don’t get paid anything until and unless we win or we get a settlement. And then whatever we do, we typically apply to the court for a portion of the settlement and it’s up to the court to approve. And based on the system, it allows up to take on cases for workers who can’t afford lawyers, because we can go for years and years and not get paid in the hopes that we’ll win and at the end of the day everyone will get paid and it’ll work out well for everybody. So that’s how we’re able to do this kind of litigation.
Harry: Okay, well I think that just about wraps up everything I had for you. And if drivers want to get in contact with you or your firm, I’ll definitely leave a link in the show notes, but is there any…what’s the best way for them to get a hold of you or reach out to you?
Shannon: So the best way is probably look at the website, www.uberlawsuit.com. That has our contact information, it has my email, it has the email addresses for my paralegal staff and associate who are working with me on the case. So that’s probably the easiest way. The name of the firm is Lichten and Liss-Riordan, and who the primary contact person is has been changing over time. So just check the website and send us an email and we will get you on our list or we’ll answer whatever questions you have.
Harry: Great. Sounds good. Well, I really appreciate you taking the time out of your day to come on, and look forward to talking to you again.
Shannon: Okay. All right. Thank you so much, Harry. I appreciate it.
Harry: All right. Take care.
Shannon: Okay, take care, Harry. Bye-bye.
Harry: So that concludes our interview with Shannon and I want to take one last opportunity to say thanks to her for coming on the podcast. I know she has a very busy schedule. And I didn’t get to ask every single question I had on my list, but I do think we covered quite a few topics. Obviously, the main goals of the interview were to really get an update on the lawsuit, clarify what’s been happening recently, what is the latest class action ruling, and how it affects drivers. Obviously, I’m very concerned with how all of this stuff affects you guys. And if you want to be a part of the lawsuit, now you know. And also, more interesting though, what are the potential implications of this lawsuit, because I think that a lot of people might be fearful.
They’re fearful of the unknown. They see this situation as this might be working for me right now. But at the same time, this model may not be working for others. And to be honest, I think the current model, the way it is set up right now, independent contractor relationship with Uber, is good for drivers. But there’s also no doubt that it’s great for these companies. Look at your bank statements over the past year and tell me what percentage they’ve increased by. And then go to Uber and compare their bank statements, their worth, their net worth and see what it’s increased by.
Uber is now worth $50 billion and counting. By the time you listen to this podcast, who knows, it could be significantly more. And ultimately, I don’t know what an employee for Uber will look like so I didn’t want to get too much into the hypothetical of what would happen if this, what would happen if that, because it’s really the unknown and it’s easy to say, “Hey, I don’t want to be an employee,” because it doesn’t sound like something we typically like. A lot of us really…it’s clear. Even Shannon mentioned on the interview, drivers love the flexibility aspect.
And for me, I don’t really see a reason why that would go away with employee status, so I’m not really sold on that argument. And at the same time though, if Uber gets sued this could and this will force them to make changes to their business model. We’re already seeing that they’re making changes to their business model. Just one example with their rideshare advertising companies. So if you guys know that I’ve written about Vugo in the past, V-U-G-O, and they’re bringing rideshare ads to the back of tablets, so drivers can earn more money.
At first, Uber said, “Hey, you guys aren’t allowed to do this,” because they thought that it took away from the riders’ experience. For drivers, it’s great. You can earn $3 an hour, $500 a month. That sounds pretty good to me on the surface. And now Uber has backtracked and said, “Okay, well we can’t tell you that you can’t do this. But you can, but we highly discourage it.” And to me, that’s a clear, direct result from these lawsuits like this. In the past, Uber could really deactivate you for any little reason, and now they have to be pretty careful. They have to say, “Hey, there’s this lawyer,” who’s Shannon, “who’s watching over us. This case is going to the courts.”
Right now it sounds like there’s a few thousand drivers in California who are eligible, but there could very easily, potentially, be many more. I suspect that hundreds or if not thousands of drivers will probably opt in to the arbitration. And ultimately, it sounds like Shannon can also go back and appeal or request that arbitration process be opened up and allowed for all drivers. Because as you guys know, that whole thing was pretty shady in my mind. Uber basically, what they did was, they made drivers if they wanted to go out and drive, opt in to this arbitration agreement, which of course was probably some 20 or 30 page document on your mobile phone that you’re not going to read right before you log in.
And in another case, that method that they used, basically, to coerce drivers to sign up, was actually found to be basically not okay with the judge, and it’s the same judge. So we’ll see what happens with that arbitration stuff. And really, what it comes down to is Uber isn’t going away if they lose. We mentioned this in the interview. They’re a $50 billion company and growing. But I think a lot of these changes that could come about from this lawsuit could end up benefitting drivers. And maybe down the road it might end up that in 5 or 10 years when this whole thing is resolved, that drivers are employees, and maybe things do change, and maybe they do change for the worse.
But I feel like in that intermediary term, a lot of the changes are going to be pretty good. I know that I would love to have more freedom to set my rates, more freedom to accept or deny certain rides, because that’s really going to benefit the savvy drivers. And I honestly see this lawsuit as a good thing. I don’t know that I’m sold on being an employee for Uber, but I do see the means to get there as a good thing. So hopefully that makes sense to you guys. And really, the attitude that you have to take is that Uber is going to go out and do what’s best for themselves. They’re going to go out and take advantage of every loophole they can, and they have the resources to do so. They have a bunch of lawyers and pretty smart people working for them.
Drivers are out there on their own, though. So if you have this attitude that these companies need you and you put yourself in the best position to make all that true, if you’re depending on those companies then they have all the power. So I think it really behooves drivers out there to really think about the long-term. If you’re in this game to be a driver for the next 10 or 20 years, you’re probably going to be a little disappointed, because there’s going to be a lot of change. It’s not…this isn’t the type of industry where you go in and you get to sit at a desk or you get to drive around and everything is going to be the same. You’re going to do the same routes every day for 20, 30 years. I can assure you that that’s not how this job works and that’s really not an attitude that you want to take through life.
So for me, I really do think that this current model works and there’s a lot of drivers who are out there doing really well. But I also know that, like we talked about on the podcast, there are a lot drivers who aren’t doing so well. And I think that if there’s a way to bring more transparency, that seems to benefit drivers a whole lot on the surface. And I think that lawsuits like this, while the end result you may not agree with, and even myself, I may not want to be an employee of Uber in the long run. I do think that the best thing about these lawsuits is that they’re going to force Uber to really recognize.
Because there’s a lot at stake here for them. And beyond Uber, there’s a lot at stake for these other smaller companies. So it’ll definitely be interesting to see what happens going forward. And I just want to…hopefully you guys enjoyed the interview and if you have any questions, comments, or feedback definitely let me know. And look forward to hearing from you. You guys know, once again, this episode is actually brought to you by Stride Health. And they’re a company that connects drivers, self-employed workers just like yourself, with health coverage and healthcare. And best of all, it’s free. And the nice thing is, whether you guys have insurance or not, Stride will help you figure out where to get care, how much you’ll pay, and they’ll even help you with doctors and discounts at the pharmacy.
So you guys know that I started using Stride recently, so I can personally recommend it. And like I said, you guys know that I like it because it’s free. So definitely make sure that even if you already have health insurance, check them out. You can get a personal advisor, someone who will help you with all your decisions. You can sign up at stridehealth.com/rideshareguy. Great way to support the site and it won’t cost you a dime. Make sure you check out the show notes. Go to therideshareguy.com/episode27. We’ll have links. We’ll have contact information. We’ll have transcripts. You can subscribe to the email list. You’ll get notified of new articles, podcasts, everything.
And if you guys have any questions at all, you have feedback on this podcast: you loved it, you hated it, you want me to interview different people, new people, you have suggestions, you want to be on this podcast. Let me know. Contact me. Shoot me an email, harry[at]therideshareguy.com. You can also find me on social media. And for everyone who’s been leaving reviews in the iTunes store, thank you very much and look forward to hearing from you guys soon. All right, take care.
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This is a transcript of Episode 27: An Interview With Shannon Liss-Riordan About The Uber Employee Misclassification Lawsuit. You can find show notes, comments and more by clicking here. You can also listen to the podcast in iTunes, Stitcher or wherever you get your podcasts.