Several years ago, Boston lawyer Shannon Liss-Riordan was visiting family and friends in San Francisco. While she was out at a restaurant in the West Portal, one of her friends pulled out his smartphone. “You have to see this, Shannon. It’s a new thing and it’s changed my life,” she recalls him saying. The friend fired up Uber, the car-hailing app. “You push a button and a car comes to pick you up.”Also at Fusion:
Then, Liss-Riordan says, her friend looked at her. “He saw what was going through my mind. Then he said, ‘Don’t you dare. You’re going to put them out of business.’”
Liss-Riordan, 45, has spent her entire legal career going after employers for allegedly short-changing their employees. She specializes in worker misclassification lawsuits—the illegal practice of companies who classify their workers as independent contractors, rather than normal employees, in order to avoid paying them benefits they’re owed under federal law. She’s filed class-action lawsuits on behalf of truck drivers, waiters, delivery men, cable installers, call center workers, and exotic dancers. FedEx and Starbucks are among companies that have paid out millions of dollars for misclassifying workers and misallocating workers’ tips, respectively, as a result of suits she’s filed.
Now, her sights are set on the so-called “on-demand economy”—the constellation of tech start-ups that provide transportation and delivery services at the tap of an app.
In recent months, Liss-Riordan has filed lawsuits against Uber, Lyft, Homejoy, Postmates, and Caviar—five of the largest on-demand start-ups in the world. These suits all boil down to a rather simple allegation: these companies pay the people who supply the equipment and manpower that power their businesses like independent contractors, while burdening them with the work expectations of employees. Representatives of Uber, Lyft, Homejoy and Caviar declined to comment on pending litigation, and Postmates did not respond to request for comment.
Harold Lichten, Liss-Riordan’s law firm partner, describes her as “a pit bull with a chihuahua in her mouth” when it comes to suing on-demand start-ups. “She will make life as difficult as possible for these companies,” he said. “Here’s Uber — this business model with $40 billion behind it, that is seen as the future — but if she’s correct about their needing to classify all of these drivers as employees, it destroys that model. And it means all these venture capital investors who have poured millions of dollars into the company have bought a pig in a poke.”...MUCH MOREU.S. District Judge Edward Chen noted that Uber sets drivers’ rates, screens them, can fire them, and needs them in order to make money. “The idea that Uber is simply a software platform, I don’t find that a very persuasive argument,” he said.
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