Razak v. Uber Technologies, Inc.

Facts

Ps are Pennsylvania drivers who utilize D's' ride-sharing mobile phone application. Ps brought individual and representative claims against D for violations of the federal minimum wage and overtime requirements under the FLSA, the Pennsylvania Minimum Wage Act (PMWA), and the Pennsylvania Wage Payment and Collection Law (WPCL). Each P owns and operates independent transportation companies (ITC). In order for drivers to contract to drive for UberBLACK, they must form ITCs. Each ITC, in turn, enters into a Technology Services Agreement with D. The Technology Services Agreement includes a Software License and Online Services Agreement that allows UberBLACK drivers to utilize the technology service D provides to generate leads, as well as outlines the relationship between ITCs and Uber riders, ITCs and Uber, and ITCs and their drivers. The Agreement describes driver requirements, vehicle requirements, and financial terms, and contains an arbitration clause for dispute resolution between ITCs and D. Ds also had to sign a Driver Addendum, which is a legal agreement between the ITC and the for-hire driver before a driver can utilize the Driver App. The Driver Addendum allows a driver to receive 'lead generation and related services' through D's Driver App. The Addendum also outlines driver requirements (such as maintaining a valid driver's license), insurance requirements, dispute resolution, and the 'Driver's Relationship with Uber,' in which D uses clear language to attempt to establish the parameters of the Driver's working relationship with D. For UberBLACK, D holds a certificate of public convenience from, and is licensed by, the Philadelphia Parking Authority (PPA) to operate a limousine company. Transportation companies and individual transportation providers who provide Black car services in Philadelphia are required to hold a PPA certificate of public convenience or associate with an entity that holds such a certificate. Some UberBLACK transportation providers operate under the PPA certificate held by D. Razak (P), operates under its own PPA certificate. About 75% of UberBLACK drivers use D's automobile insurance. Ps claiming they were employees sued D for violations of minimum wage and overtime requirements under federal and state laws. Ps contend that time spent online on the Uber Driver App qualifies as compensable time under the FLSA. Once online with D's Driver App, a driver can choose to accept a trip, but if the driver does not accept the trip within fifteen seconds of the trip request, it is deemed rejected by the driver. The Driver App will automatically route the trip request to the next closest driver, and if no other driver accepts the trip, the trip request goes unfulfilled, as Uber cannot require any driver to accept a trip. UberBLACK drivers are free to reject trips for any reason, aside from unlawful discrimination. However, if a driver ignores three trip requests in a row, the Uber Driver App will automatically move the driver from online to offline, such that he cannot accept additional trip requests. D sets the financial terms of all UberBLACK fares, and riders pay by having their credit cards linked to the App. D logs off drivers for a period of six hours if the driver reaches D's twelve-hour driving limit. Drivers do not know where a rider's final destination is prior to accepting the ride. D claims that Ps are not employees as a matter of law. D claims UberBLACK drivers as entrepreneurs who utilize Uber as a software platform to acquire trip requests and that drivers are not restricted from working for other companies, paying their own expenses, and on some occasions, engaging workers for their own ITCs. D places no restrictions on drivers' ability to engage in personal activities while online. The District Court agreed with D granting summary judgment on the question of whether Ps qualify as 'employees' of Uber under the FLSA and PMWA. Ps appealed.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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