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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
×
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Suggested Citation:"V. RSP Cases and Regulatory Proceedings." National Academies of Sciences, Engineering, and Medicine. 2018. Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers. Washington, DC: The National Academies Press. doi: 10.17226/25109.
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73 records law.563 No such provisions were identified that would preclude a contractual agreement to provide such records, however, or that would cover the public records act status of an agreement with, or records provided to, a transit agency. 4. Privacy State TNC statutes and/or regulations may specifi- cally address passenger privacy. For example, the California statute restricts a TNC’s disclosure of personally identifiable information concerning TNC passengers to third parties.564 The Massachusetts TNC regulation requires similar protection of personal data for both passengers and drivers. In addition, that regulation requires TNCs to notify passengers and drivers of its use of personal information and to main- tain a data security policy consistent with Massachu- setts’ generally applicable requirements for protection of the privacy of Massachusetts residents.565 V. RSP CASES AND REGULATORY PROCEEDINGS Potential TNC litigation may pose risk manage- ment issues for transit agencies entering relation- ships with those TNCs for at least one of two reasons: the chance that the transit agency will be drawn into the litigation and the possibility that the litiga- tion may affect the TNC’s ability to meet service commitments to the transit agency. Most of the litigation involving RSPs in fact deals with TNCs, not other RSPs. As discussed further in this digest, such litigation has involved both drivers suing TNCs and claims alleging tort liability on the part of the TNCs and drivers. As of November 2017, no cases were identified that had been fully adjudicated.566 However, plaintiffs have had at least some procedural success in ongoing litiga- tion, for example, Search v. Uber Technologies, Inc.567 Thus, despite the prevalence of settlements, evolution of the law related to TNCs is discernible through opin- ions concerning the validity of plaintiffs’ claims in numerous rulings on motions to dismiss and motions for summary judgment. As of February 2018, only one case centering on the employment status of gig econ- omy workers—albeit not a TNC driver, but a food Lyft and Uber both maintained that sharing even anonymized data with public agencies would endanger the privacy of riders and drivers.557 The CPUC has also previously found Rasier in contempt for failing to fully comply with certain reporting requirements under Decision 13-09-045 that address accessibility, availabil- ity, and driver safety information.558 TNCs have resisted sharing CPUC data with local authorities, resulting in enforcement actions by local government. As discussed infra Part V, RSP Cases and Regula- tory Proceedings, San Francisco officials have also sued TNCs to obtain records. The San Francisco microtransit regulation requires permittees to provide aggregate GPS data to SFMTA. Other data such as schedule, ridership, and routing data must be provided within 5 busi- ness days of any data request from SFMTA, where such data is reasonably available and accessible. All such data must not contain personal identifying information or individualized usage information.559 The New York City Taxi and Limousine Commis- sion has added TNCs to its fatigued driving rule, requir- ing TNCs to provide data on pickup and drop-off times and locations, as well as whether the trips are shared.560 2. Record Retention A number of state TNC statutes include record retention requirements. However, there is consider- able variation in such requirements, ranging from as little to 1 year from date of trip provision/termina- tion of driver activation561 to 7 years for incident reports.562 In addition, the statutes vary as to the types of records that are covered. 3. Public Records Law A number of state TNC statutes exempt records submitted to the applicable regulatory agency under those laws in whole or in part from the state’s public 557 Cheryl Miller, Uber and Lyft Resist Regulators’ Appeal for Data Sharing, the reCorder, Oct. 10, 2017, https://www.law.com/therecorder/almID/1202800099561/ (accessed Nov. 9, 2017). 558 D. 16-01-014, Jan. 14, 2016, issued Jan. 15, 2016 (Mod- ified presiding officer’s decision finding Rasier-CA, LLC, in contempt, in violation of Rule 1.1 of the Commission’s Rules of Practice and Procedure, and finding that Rasier-CA, LLC’s license to operate should be suspended for failure to comply with Commission D. 13-09-045), http://docs.cpuc.ca.gov/ publisheddocs/published/g000/m157/k724/157724635.pdf. 559 S.F. mun. tranSP. Code, § 1207 (h) (2017). 560 Revised Fatigued Driving Prevention Rules, http:// www.nyc.gov/html/tlc/downloads/pdf/proposed_rule_rev_ driver_fatigue_2_2_17.pdf; Tyler Woods, New Uber/Lyft data-sharing rules pass over privacy objections from NYC Public Advocate, teChnICally brooklyn, Feb. 3, 2017, https:// technical.ly/brooklyn/2017/02/03/new-uber-lyft-data- sharing-rules-privacy-objections-public-advocate/. 561 kan. Stat. § 8-2717 (2016). 562 maSS. Gen. lawS ch. 159A1/2, § 8 (2016). 563 N.J. Stat. § C.39:5H-6 (2017). 564 Cal. Pub. utIl. Code § 5437 (2016). 565 220 maSS. Code reGS. § 274.10. 566 Attorneys pursuing class actions may have some financial incentive to settle employment classification cases. Ruth Berins Collier, V.B. Dubal & Christopher Carter, Labor Platforms and Gig Work: The Failure to Regulate, Institute for Research and Labor Employment (IRLE) U.C., Working Paper #106-17 (Inst. For Research on Labor and Employ) (Sept. 2017), at 19. 567 128 F. Supp. 3d 222 (D. D.C. 2015).

74 A. Employment Classification Use of the independent contractor designation is a central component of the business model in the so-called gig economy, iconically so among TNCs. In other words, TNCs’ business model relies in large part on not being deemed to be the employer of their drivers. Classifying drivers as independent contrac- tors rather than as employees provides TNCs signif- icant cost advantages, with the cost savings for Uber in California alone estimated to run over $200 million,570 without which TNCs would have lost even more money than they did as of the end of 2017.571 [E-8] In May 2017, Uber began a limited program to compensate drivers injured while driving for Uber. The program is voluntary and is funded by a ride surcharge and driver payments. The costs to Uber of paying for unemployment insurance would be considerably higher.572 Causes of action that challenge workers’ employ- ment classification are endemic in the gig econ- omy.573 The classification issue has also arisen in litigation that is based on the alleged tortious action of TNC drivers, because of the effect of the driver’s employment status on the hiring entity’s tort liabil- ity (discussed supra Part III.F, Tort Liability). In addition, employee classification may affect the effi- cacy of indemnifications in TNC contracts. service delivery driver working for Grubhub— had resulted in a trial court opinion.568 Consequently, that 2018 opinion is also discussed infra Part V. Part V discusses actions that involve the following issues: employment classification; accessibility require- ments; violation of TNC statutes; fraud, misrepresen- tation, and unfair competition; and tort actions. The discussion also covers several cases involving miscel- laneous issues. Employment classification and tort actions appear to present the greatest risk manage- ment challenges for transit agencies; consequently, those cases are discussed in more detail than are those in the other categories. Although there seems to be a dearth of reported accessibility cases, this may none- theless be another area of potential exposure. Numerous cases have been brought against TNCs that ostensibly involve other issues but really turn on employment classification. Part V includes most cases that turn on employment classification under this heading; however, cases that involve an issue of likely interest to transit agencies, such as accessibil- ity and tort actions, are addressed under separate headings. Part V does not cover multiple actions to add plaintiffs to class actions filed against TNCs, nor does it cover a number of additional actions relating to violation of the Telephone Consumer Protection Act, invasion of privacy through unauthorized access to medical records, enforcement of NLRB subpoenas, and the Fair Credit Reporting Act.569 568 See Lawson v. Grubhub, No. 15-cv-05128-JSC, 2018 U.S. Dist. LEXIS 21171, (N.D. Cal. Feb. 8, 2018). 569 Bank v. Uber Techs. Inc., No. 15-cv-4858 (JG), 2015 U.S. Dist. LEXIS 166302 (E.D.N.Y. Dec. 11, 2015), aff’d, Bank v. Uber Techs. Inc., 669 F. App’x 579 (2d Cir. Oct. 18, 2016) (granting motion to dismiss complaint alleging viola- tion of the Telephone Consumer Protection Act of 1991 (TCPA) in connection with Uber robocall campaign against proposed ordinance limiting number of for-hire vehicles in NYC); Doe v. Uber Techs., Inc., No. 3:17-cv-03470 (N.D. Cal. June 15, 2017) (complaint, jury trial demand; allegation that Uber unlawfully obtained plaintiffs’ medical records in order to undermine her rape claim); Fente v. Jobcase, Inc., No. 1:2017cv24082 (S.D. Fla. Nov. 7, 2017) (complaint alleg- ing violation of TCPA); In the Matter of Lyft, Inc., File No.: EB-TCD-15-00019865, Federal Communications Commis- sion, Notice of Citation, Sept. 11, 2015 (cautioning Lyft that its requirement that users consent to receiving texts in order to use its services violated the TCPA), https://apps.fcc. gov/edocs_public/attachmatch/DA-15-997A1.pdf; Nat’l Labor Relations Bd. v. Uber Techs., Inc., No. 216 F. Supp. 3d 10004 (N.D. Cal. Oct. 17, 2016) (granting enforcement of administrative subpoenas re NLRB investigation of charges of unfair labor practices against Uber); Nokchan v. Lyft, Inc., 2016 U.S. Dist. LEXIS 138582 (N.D. Cal., Oct. 5, 2016) (Fair Credit Reporting Act claim dismissed without preju- dice for failure to allege concrete harm); Wright v. Lyft, No. 2:14-CV-00421 MJP (W.D. Wash. Apr. 15, 2016) (Order dis- missing TCPA claim), http://www.manatt.com/Manatt/media/ Media/PDF/Newsletters/TCPA%20Connect/Wright-v- Lyft.pdf. 570 Cunningham-Parmeter, supra note 212, at 1686, cit- ing nat’l emP’t law ProJeCt, IndePendent ContraCtor mISClaSSIFICatIon ImPoSeS huGe CoStS on workerS and Federal and State treaSurIeS 1 (2015) for proposition that “Uber can save up to thirty percent in payroll taxes simply by classifying its drivers as nonemployees;” Press Release, U.S. Dep’t of Labor, Bureau of Labor Statistics, Employer Costs for Employee Compensation—September 2015 (Dec. 8, 2016), http://www.bls.gov/news.release/ecec.htm (accessed Jan. 4, 2017). See also, Redfearn, supra note 222, at 1027–28. California-specific costs are discussed in Carmel Deamicis, Uber Could Have to Pay an Additional $209 Million to Reclassify Its Drivers in California, reCode, July 14, 2015, http://www.recode.net/2015/7/14/ 11614646/uber-could-have-to-pay-an-additional-209- million-to-reclassify-its (accessed Feb. 14, 2017). 571 For a discussion of the fundamental unprofitability of Uber’s business model, see Len Sherman, Why Can’t Uber Make Money?, ForbeS, Dec. 14, 2017, https://www. forbes.com/sites/lensherman/2017/12/14/why-cant-uber- make-money/amp/?__twitter_impression=true (accessed December 16, 2017). [E-8] 572 Susan Nanes, Employee or Nonemployee? That Is the Question in Uber Cases, leGal IntellIGenCer, Nov. 9, 2017, https://www.law.com/thelegalintelligencer/sites/thelegal intelligencer/2017/11/09/employee-or-nonemployee-that- is-the-question-in-uber-cases/?cmp=share_twitter (accessed Nov. 13, 2017). 573 See, e.g., Means & Seiner, supra note 228, at 1513.

75 while they are on duty.576 The answer to this ques- tion is likely to vary by jurisdiction. Moreover, even as the legal principles become more defined, indi- vidual case results may vary, as the employment classification determination is very fact-dependent. An individual driver’s frequency of providing service, or even whether the driver leases the TNC vehicle and from whom,577 may affect that determination. However, unless and until employment classifica- tion actions are fully litigated rather than being settled, determination will remain uncertain. There are a myriad of cases involving drivers suing TNCs for violating federal and state labor laws related to employment classification, such as wage and hour requirements, and fair credit report- ing acts.578 This section discusses a number of the higher profile employment classification actions that have been filed against Uber and Lyft. Except for the pending consolidation in the Ninth Circuit, the section does not discuss the details of the numer- ous arbitration agreement cases. 1. Federal Circuit Court Cases There have been numerous TNC driver causes of action asking district courts to rule that the driver has been misclassified as an independent contractor. For the most part, these cases have been stymied by the fact that those courts have generally held that Given that employment classification is one of most active areas of TNC litigation, although TNC drivers may currently be classified as indepen- dent contractors, in many jurisdictions this is an area of the law that may change over time.574 The resolution of the issue of employment classifica- tion of TNC drivers will also be affected by deci- sions concerning the enforceability of arbitration clauses (which may significantly limit the number of potential plaintiffs) and the prevalence of settle- ments in the employment classification actions. These evolving legal issues may have significant effects on the economics of transit agencies’ use of TNCs as service providers, particularly to the extent that cheaper labor is a driving factor for transit agencies in entering into agreements for such service. The TNC position in virtually any court case involving drivers turns on the adamant position that the drivers are independent contractors. Thus the outcome of employment classification cases could affect much of the other TNC litigation. A key question as this body of law develops is whether in assessing TNC control over drivers the courts focus on the drivers’ alleged ability to control their own working hours—while ostensibly a matter of driver preference, scheduling may be greatly affected by TNC pricing575—or on the TNC’s control over drivers 576 One analyst identified six factors that the author considered critical in determining whether Uber drivers should be classified as employees under California law, and concluded that on balance they should favor a finding that the TNC exercises the requisite control for the finding of employment relationship. Redfearn supra note 222, at 1047–52. See also, Macmurdo, supra note 442, at 332–34 (setting forth factors that support finding of employment relationship for TNC drivers). 577 Drivers who lease vehicles from TNCs may have much less actual control over their own schedule than those who own their own vehicles, see id. at 1543. TNCs have made such arrangements in order to attract drivers, although Uber has had to make adjustments in its sys- tem. See discussion of FTC action, infra Part V.D, Fraud/ Misrepresentation/Unfair Competition/Privacy; Alison Griswold, Uber has ended its subprime car leasing pro- gram for New York drivers, quartZ, Nov. 10, 2017, https:// qz.com/1125601/uber-has-ended-its-subprime-car- leasing-program-for-new-york-drivers/ (accessed Nov. 15, 2017). In addition, in 2017 General Motors began market- ing rental cars to TNC drivers. GM’s rental service reaches Baltimore, helping ‘gig’ economy, AP, mIamI herald, Nov. 14, 2017, http://www.miamiherald.com/news/business/ article184500358.html (accessed Nov. 15, 2017). 578 Marisa Kendall, Uber battling more than 70 law- suits in federal courts, merCury newS, Aug. 11, 2016, http://www.mercurynews.com/2016/07/04/uber-battling- more-than-70-lawsuits-in-federal-courts/. 574 For an argument of why TNC drivers should be con- sidered employees, see Pamela A. Izvanariu, Matters Set- tled But Not Resolved: Worker Misclassification in the Rideshare Sector, 66 dePaul l. reV. 133 (2017). See also Cunningham-Parmeter, supra note 212, at 1686, arguing that Uber and other on-demand firms have a significant influence over working conditions, despite the apparent lack of control over worker schedules. Given the difficulties of applying traditional legal tests to the gig economy, more than one commentator has called for a new employment classification for workers in the shared economy. E.g., Megan Carboni, A New Class of Worker for the Sharing Economy, 22 rICh. J.l. & teCh 11 (2016); Miriam A. Cherry & Antonio Aloisi, “Dependent Contractors” In the Gig Econ- omy: A Comparative Approach, 66 am. u. l. reV. 635 (2017); Means & Seiner, supra note 228; Redfearn, supra note 222. As of October 2017, there was some indication that the Department of Labor recognized the need to update laws to account for the gig economy. Chris Opfer & Ben Penn, Sharing-Economy Laws Are Congress’ Gig, Labor Secre- tary Says, bloomberG bna, Nov. 9, 2017 https://www.bna. com/sharingeconomy-laws-congress-n73014471942/ (accessed Nov. 15, 2017). 575 Means & Seiner, supra note 228, at 1542.

76 that the questions at issue were whether there was a valid agreement to arbitrate and then whether defendants had waived their right to enforce the agreement. The court discussed different possible online agreement formats and how those formats affect the central question of whether the existence of the terms was reasonably communicated to the user. The court concluded that for “the interface at issue in this case . . . the design of the screen and language used render the notice provided reason- able as a matter of California law,”582 adding, “We think that a reasonably prudent smartphone user would understand that the terms were connected to the creation of a user account.”583 The court then found that although Meyer had not affirmatively assented to arbitration, he had received objectively reasonable notice of the terms and conditions that in fact contained the arbitration requirement, and by registering after being notified that to do so was to accept the terms and conditions (which he had an opportunity to review before registering), he had agreed to arbitration. However, the appellate court also remanded to the district court to determine the question of whether the defendants had waived their right to compel arbitration by participating in the litigation regarding the dispute. Ninth Circuit Consolidated Interlocutory Appeals.— In April 2017, the Ninth Circuit ordered the consoli- dation of eleven interlocutory appeals arising out of four actions before the District Court for the North- ern District of California;584 these involved the ques- tion of whether mandatory arbitration clauses in the drivers’ TNC agreements required the claims be heard by an arbitrator, not the court. An earlier case involving one of those appellees, Mohamed, had already determined that the arbitration clauses agreed to by those drivers were enforceable as to all claims except for those brought under the California Private Attorney General Act (PAGA) and that therefore the question of arbitrability itself of those other claims was a question for the arbitrator.585 The Mohamed appellate decision did hold that the back- ground check company that sought to compel arbi- tration of claims against it was not entitled to compel the TNC arbitration agreements were enforceable.579 Moreover, as of 2017 most of the employment clas- sification cases not dismissed in favor of arbitration were settled before reaching a final adjudication at the district court level and therefore never advanced to the appellate level. Meyer v. Uber Technologies, Inc.580—Although not involving an Uber employee, Meyer is of interest in judging the likely direction of cases involving arbi- tration agreements in TNC employee litigation. This case involved an Uber customer who had alleged that Kalanick had engaged in an antitrust conspir- acy related to the Uber algorithm used to set prices for rides. The lower court had denied the defendant’s motion to compel arbitration but had stayed proceed- ings on the underlying claims pending appeal of the arbitration motion.581 The appellate court stated 579 E.g., Olivares v. Uber Techs., Inc., No. 16 C 6062, 2017 U.S. Dist. LEXIS 109348 (N.D. Ill. July 14, 2017); Carey v. Uber Techs., Inc., No. 1:16-cv-1058, 2017 U.S. Dist. LEXIS 44340 (N.D. Ohio Mar. 27, 2017); Singh v. Uber Techs. Inc., 235 F. Supp. 3d 656 (D. N.J. 2017); Rimel v. Uber Techns., Inc., 246 F. Supp. 3d 1317 (M.D. Fla. 2017); Bekele v. Lyft, Inc., 199 F. Supp. 3d 284 (D. Mass. 2016) (arbitration clause enforce- able; extensive analysis); Congdon v. Uber Techs., Inc., No. 226 F. Supp. 3d 983 (N.D. Cal. 2016) (arbitration analysis differentiates between opt-out and non-opt-out drivers); Gunn v. Uber Techs., Inc., No. 1:16-cv-01668-SEB-MJD, 2017 U.S. Dist. LEXIS 11393 (S.D. Ind. Jan. 27, 2017) (compelling arbitration); Micheletti v. Uber Techs., Inc., 213 F. Supp. 3d 839, (W.D. Tex. 2016) (granting motion to dismiss in favor of arbitration; applies Texas law, but notes result would be same under California law); Cullinane v. Uber Techs., Inc., No. 14-14750-DPW, 2016 U.S. Dist. LEXIS 89540, at *7 (D. Mass. July 11, 2016) (applying Massachusetts law and granting motion to compel arbitration). Cf, Applebaum v. Lyft, Inc., 263 F. Supp. 3d 454 (S.D.N.Y. 2017) (applying New York law and denying motion to compel arbitration where notice of contract terms was insufficient to bind plaintiff); Mohamed v. Uber Techs., Inc., 237 F. Supp. 3d 719 (N.D. Ill. 2017) (motion to compel arbitration dismissed because fac- tual question exists as to whether plaintiff agreed to arbitra- tion). An enforceable arbitration clause was also held to be the basis for dismissing an action against Lyft for breach of contract, fraud, and negligent misrepresentation. Loewen v. Lyft, Inc., 129 F. Supp. 3d 945 (N.D. Cal., 2015). The court also granted Lyft’s motion to compel arbitration. For a discussion of arbitration issues in this context, see Carissa Laughlin, Arbitration Clause Issues in Sharing Economy Contracts, 2017 J. dISP. reSol. 197 (2017); Elizabeth Chika Tippett & Bridget Schaaff, Misclassification in the Sharing Economy: It’s the Arbitration Agreements (July 14, 2017). rutGerS l. reV., available at SSRN: https://ssrn.com/abstract=3009913. (sign-in required) 580 868 F.3d 66 (2d Cir. 2017). 581 Meyer v. Kalanick, 203 F. Supp. 3d 393 (S.D.N.Y. 2016) (granting motion to stay proceedings pending resolution of interlocutory appeal); Meyer v. Kalanick, 199 F. Supp. 3d 752; Meyer v. Kalanick, 200 F. Supp. 3d 410 (S.D.N.Y. 2016) (denying motion compel arbitration); Meyer v. Kalanick, 174 F. Supp. 3d 817 (S.D.N.Y., March 31, 2016) (denying motions to dismiss and to reconsider the court’s determination that the plaintiff could proceed via class action). 582 Meyer, 868 F.3d at 78. 583 Id. 584 No. 15-17534 (9th Cir. Apr. 4, 2017). The consolidated cases were O’Connor v. Uber Techs., Nos. 14-16078, 15-17420, 15-17532, 16-15000, 16-15595; Yucesoy v. Uber Techs., Nos. 15-17422, 15-17534, 16-15001; Del Rio v. Uber Techs., No. 15-17475; and Mohamed v. Uber Techs., Nos. 15-17533, 16-15035. See Uber Cases, Consolidated Appeals, U.S. Courts for the Ninth Circuit, https://www.ca9.uscourts.gov/ content/view.php?pk_id=0000000876. 585 Mohamed v. Uber Techs., Inc., 836 F.3d 1102 (9th Cir. 2016), reh’g denied en banc; amended opinion, 848 F.3d 1201 (9th Cir. 2016).

77 In its opening brief, Uber raised numerous issues related to its arbitration agreement and the district court’s orders affecting enforcement thereof. Most material to misclassification issues, Uber urged the court to uphold the enforceability of the Uber arbi- tration agreement, relying on the Mohamed decision. Uber also asked the court to reject the plaintiffs’ argument that the class waiver in the arbitration agreement violates collective action rights under the NLRA, because (a) the question of validity is reserved to the arbitrator, (b) the Ninth Circuit has already held that there is no NLRA violation where there is a right to opt out of a class waiver, and (c) Uber driv- ers are independent contractors and therefore not subject to the NLRA. Finally, Uber argued that class certification was inappropriate, because applying the Borello factors to determine the existence of an employment relationship requires an individual analysis for each driver and for each agreement (there were seventeen different agreements entered into with drivers over the class period).587 On September 22, 2017, the Ninth Circuit issued an order withdrawing the cases from submission pending the resolution of the arbitration cases then pending before the Supreme Court.588 The Supreme Court decision was not expected before 2018.589 2. Federal District Court Cases The Northern District of California has been the forum for what are arguably the two most signifi- cant TNC decisions to have been issued (as of November 2017). While not determining the employ- ment status of TNC drivers, the Cotter and O’Connor decisions are notable for the courts’ rejections of the argument that TNCs are not transportation arbitration as Uber’s agent. The underlying allega- tions against Uber in Mohamed were violations of acts prohibiting employment decisions based on consumer credit reports and misclassification in violation of California’s PAGA statute.586 The court holding that the arbitration clauses were not uncon- scionable rested on the fact that they contained opt- out provisions and that those provisions were not illusory because some drivers had opted out of them. The court left open the question of whether a requirement that the parties split the cost of arbi- tration would preclude the drivers from effectively vindicating their federal statutory rights, so long as Uber abides by its commitment to pay the full cost of arbitration. However, the Mohamed court did not discuss whatsoever the merits of the argument that Uber drivers had been misclassified as employees under California and/or Massachusetts law. The appeals of the district court’s rulings in O’Connor, Yucesoy, Del Rio, and Mohamed related to that court’s denying enforcement of arbitration agreements in those cases, as well as enjoining Uber from enforcing those arbitration agreements because of the advantages of class litigation as opposed to bilateral arbitration. Uber also appealed the O’Connor order granting class certification in that case. Despite the fact that the Ninth Circuit had already held that Mohamed’s arbitration agree- ment was enforceable, Uber took the position that the district court’s injunction in the Mohamed action constituted further grounds for appeal. 586 California appears to disfavor requiring arbitration of PAGA claims. Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348, 327 P.3d 129, 173 Cal. Rptr. 3d 289 (Cal. 2014) (even though class-action waivers in arbitra- tion agreements were enforceable, where “an employment agreement compels the waiver of representative claims under the Private Attorneys General Act (PAGA), it is con- trary to public policy and unenforceable as a matter of state law”); Betancourt v. Prudential Overall Supply, 9 Cal. App. 5th 439, 215 Cal. Rptr. 3d 344 (2017) (PAGA claim is a dispute between an employer and the state, so an agreement between an employer and an employee can- not bind the state to arbitration); Hernandez v. Ross Store 7 Cal. App. 5th 171, 212 Cal. Rptr. 3d 485 (2016) (employer may not legally compel employee to arbitrate individual aspects of PAGA claim while maintaining the representa- tive claim in court); Tanguilig v. Bloomingdale’s 5 Cal. App. 5th 665, 210 Cal. Rptr. 3d 352 (2016) (PAGA repre- sentative claim is nonwaivable by plaintiff-employee via predispute arbitration agreement with employer, PAGA claim—individual or representative—cannot be ordered to arbitration without the state’s consent). See also Chelsea Trotter, Amber Healy, California Court of Appeal Contin- ues Trend Rejecting Arbitration of PAGA Claims, labor and emPloyment law bloG, Mar. 15, 2017, http://www. aalrremploymentlaw.com/california-court-of-appeal- continues-trend-rejecting-arbitration-of-paga-claims/ #page=1 (accessed Mar. 17, 2017). 587 O’Connor v. Uber Techs., Inc., Yucesoy v. Uber Techs., Inc., Mohamed v. Uber Techs., Inc., Del Rio v. Uber Techs., Inc., No. 14-16078, Appellants’ Opening Brief, at 46 (9th Cir. May 3, 2017). 588 O’Connor v. Uber Techs., Inc., Nos. 14-16078, 15-17420, 15-17532, 16-15000, 16-15595, Yucesoy v. Uber Techs., Inc., Nos. 15-17422, 15-17534, 16-15001, Del Rio v. Uber Techs., Inc., No. 15-17475, Mohamed v. Uber Techs., Inc., Nos. 15-17533, 16-15035 (9th Cir. Sept. 22, 2017) (order of with- drawal from submission), https://dlbjbjzgnk95t.cloudfront. net/0967000/967174/https-ecf-ca9-uscourts-gov-n-beam- servlet-transportroom-servlet-showdoc-009029380920.pdf. 589 O’Connor v. Uber Techs., Inc., Yucesoy v. Uber Techs., Inc., Mohamed v. Uber Techs., Inc., Del Rio v. Uber Techs., Inc., No. 14-16078, Order (9th Cir. Sept. 22, 2017), https:// dlbjbjzgnk95t.cloudfront.net/0967000/967174/https- ecf-ca9-uscourts-gov-n-beam-servlet-transportroom-serv- let-showdoc-009029380920.pdf; Richard Meneghello, Court Presses Pause On Uber Misclassification Cases, Awaiting SCOTUS Ruling On Class Waivers, GIG emPloyer bloG, Oct. 10, 2017, https://www.fisherphillips.com/gig-employer/ court-presses-pause-on-uber-misclassification-cases# page=1 (accessed Oct. 13, 2017).

78 The court reviewed the general presumption under California law of employee status for a person performing services, with the burden on an alleged employer to prove an individual is in fact an inde- pendent contractor, as well as the protections and benefits under California law of employee status, including receiving unemployment benefits and minimum wage. The court noted that the legislative intent in providing these benefits is to protect employees in the face of employers’ bargaining advantage. Independent contractors, on the other hand, are deemed to be in a better bargaining posi- tion and not in need of employment benefits.594 Accordingly, the court discussed the need to apply the “control-of-work-details test . . .with deference to the purposes of the protective legislation.”595 Citing the seminal California Supreme Court case on applying the control test under California law, the court noted that the principal test is whether the company receiving service “has the right to control the manner and means of accomplishing the result desired.”596 Weighing that question along with the myriad secondary factors also required to be consid- ered, and taking into account the presumption of employee status, results in a particularly high bar in establishing independent contractor status as a matter of California law. In applying these standards to the case at hand, the court found that a reasonable jury could conclude the plaintiffs were employees, but also could conclude that they were independent contractors, so that summary judgment was inappropriate. In so doing, the court rejected Lyft’s contention that the drivers did not perform any service for Lyft at all. In assessing right to control under California law, the court remarked, “Whether Lyft actually exercises this control is less important than whether it retains the right to do so.”597 In reviewing the ways in which Lyft did exercise control over the drivers, the court noted that the right to terminate drivers without cause is “perhaps the strongest evidence of the right to control.”598 In explaining the defects in Lyft’s argu- ments that the drivers are independent contractors as a matter of law, the court also cited recent cases with what it deemed to be similar facts that held delivery drivers to be employees under California law.599 On the other hand, the court found several FedEx cases providers and for the rulings that TNC drivers are not, as a matter of law, independent contractors. District courts in Pennsylvania and the District of Columbia have also refused to rule that TNC drivers are independent contractors as a matter of law. Cotter v. Lyft.590—Cotter involved two former Lyft drivers seeking class action remedies for all Lyft drivers in California. The plaintiff drivers sought injunctive and monetary relief, asking the court to (a) declare that they were employees under Califor- nia law and entitled to all the employee benefits thereunder and (b) award reimbursement of expenses incurred as drivers and damages and penalties for failure to provide various employee benefits, including minimum wage and overtime. The parties agreed to consider the legal determina- tion concerning independent contract status before considering class action certification.591 Thus in the first action, the plaintiff drivers asked the district court to declare them employees as a matter of California law; Lyft asked the court to declare the drivers independent contractors as a matter of California law. Although the case was ulti- mately settled,592 the court’s analysis in the summary judgment ruling is relevant to the issue of employ- ment classification under California law. The district court judge rejected those cross- motions for summary judgment and ordered the case to trial, noting that under California law, worker classification is a jury question unless the court determines that “application of the multitude of relevant factors would require any reasonable juror to reach the same conclusion [as the court]. Here, because the numerous factors for deciding whether a worker is an employee or an independent contractor point in decidedly different directions, a reasonable jury could go either way.”593 590 The Cotter litigation involved three reported orders (the denial of the cross-motions for summary judgment and two additional opinions related to the case settle- ment), as well as two unreported orders related to settle- ment: Cotter v. Lyft, 60 F. Supp. 3d 1067 (N.D. Cal. 2015) (denying the parties’ cross-motions for summary judg- ment); Cotter v. Lyft, Inc., 176 F. Supp. 3d 930 (N.D. Cal. 2016) (denying the motion for preliminary approval of the $12 million settlement); Cotter v. Lyft, Inc., 193 F. Supp. 3d 1030 (N.D. Cal. 2016) (granting the motion for prelimi- nary approval of the $27 million settlement); Cotter v. Lyft, Inc., 13-cv-4065, Dkt. No. 293, (N.D. Cal. Dec. 23, 2016) (re fairness hearing and supplemental class notice); Cotter v. Lyft, Inc., No. 13-cv-04065-VC, 2017 U.S. Dist. LEXIS 38256 (N.D. Cal. Mar. 16, 2017) (granting motion for final approval of settlement). 591 Cotter, 176 F. Supp. 3d at 932–33. 592 Cotter v. Lyft, Inc., No. 13-cv-04065-VC, 2017 U.S. Dist. LEXIS 38256, at 1 (N.D. Cal. Mar. 16, 2017) (granting motion for final approval of settlement). 593 Cotter, 60 F. Supp. 3d at 1070. 594 Id. at 1073–75. 595 Id. at 1075, citations omitted. 596 Id. citing Borello v. Dep’t of Indus. Relations, 48 Cal. 3d. 341, 350, 769 P.2d 399, 404, 256 Cal. Rptr. 543, 548 (1989) (internal citations omitted). 597 Id. at 1078. 598 Id. at 1079, citing Ayala v. Antelope Valley Newspa- pers, Inc., 59 Cal. 4th 522, 173 Cal. Rptr. 3d 332, 327 P.3d 165, 171 (2014).

79 The second proposed settlement agreement raised the settlement amount to $27 million, with no increase in the plaintiffs’ attorneys’ fees. The court found this settlement to be fair, reasonable, and adequate, and granted the motion for preliminary approval.605 In granting the motion for final approval of the settlement agreement, the court declined to approve proposed language enjoining members of the settlement class from filing future actions related to the released claims. Notably the court remarked that “the status of Lyft drivers under California law remains uncertain going forward.”606 Lawson v. Grubhub.607—This case involved claims of a former delivery driver for a food delivery service that Grubhub misclassified him as an independent contractor. The plaintiff sought reimbursement of expenses, minimum wage, and overtime. The court dismissed the defendant’s motion for summary judg- ment, finding that there were material issues of disputed fact concerning the plaintiff ’s employment classification and whether the defendant had failed to reimburse expenses, pay overtime, and pay mini- mum wage, as alleged.608 The court recited the presumption of employment under California law, citing O’Connor v. Uber Techs, Inc.609 for the proposi- tion that the employer’s burden of establishing inde- pendent contractor status at the summary judgment stage is difficult to meet, and stated that Grubhub had not met it. In reviewing Grubhub’s right to exer- cise control, the court found that Grubhub’s right to discharge at will, without cause, and the fact that once drivers signed up for a block of time for work they must be available and deliver most of the orders received or face termination, supported the finding of an employment relationship. As to secondary Borello factors, the lack of a high degree of skill to perform the job, the indefinite nature of the drivers’ tenure with Grubhub, the complaint feedback system, the central nature of the drivers to Grub- hub’s business, and the compensation system supported a finding of employment relationship. cited by the plaintiffs to be distinguishable because of the overwhelming control exerted by FedEx over those drivers.600 The court indicated that a key issue for the jury in deciding the classification question would be whether a driver drove “regularly and full time, or sporadically and part time,” with a driver in the former situation more likely to look like the type of person legislators intended to protect under Califor- nia law, while a driver in the latter situation arguably looked more like an independent contractor.601 The court summed up its view of the difficulty of deciding this case (and by implication others like it)—using a widely quoted phrase—as follows: As should now be clear, the jury in this case will be handed a square peg and asked to choose between two round holes. The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in address- ing this 21st Century problem. Some factors point in one direction, some point in the other, and some are ambiguous. Perhaps Lyft drivers who work more than a certain number of hours should be employees while the others should be independent contractors. Or perhaps Lyft drivers should be considered a new category of worker altogether, requiring a different set of protections. But absent legislative interven- tion, California’s outmoded test for classifying workers will apply in cases like this. And because the test provides noth- ing remotely close to a clear answer, it will often be for juries to decide. That is certainly true here.602 The first proposed settlement agreement would have set up a fund of $12.25 million and would have distinguished between full- and part-time drivers (as defined under the settlement agreement) for purposes of reimbursement rates. Five Lyft drivers and the Teamsters filed an objection to the settlement on the grounds that the settlement must require Lyft to classify its drivers as employees. The court rejected that argument, and in doing so emphasized that the risk of going to trial for the majority of drivers who worked part-time was high, and that the settlement would not preclude future actions concerning misclas- sification, for example, claims under the PAGA to enforce California’s wage and hour laws.603 The court then evaluated the fairness of the agreement and concluded that it shortchanged the drivers on their mileage reimbursement claim, and the State of Cali- fornia and the drivers on the PAGA claim.604 599 Id. at 1080–81, citing JKH Enterprises v. Depart- ment of Industrial Relations, 48 Cal. Rptr. 3d 563, 568–79 (Cal. Ct. App. 2006) and Air Couriers International v. Employment Development Department, 59 Cal. Rptr. 3d 37, 38–39 (Cal. Ct. App. 2007). 600 Id. at 1081, citing Alexander v. FedEx Ground Pack- age Systems, 765 F.3d 981, 989–91 (2014) and Ruiz v. Affinity Logistics, 754 F.3d 1093 (2014) 601 Cotter, 176 F. Supp. 3d at 933. 602 Cotter, 60 F. Supp. 3d at 1081–82. 603 Cotter, 176 F. Supp. 3d at 334–37. 604 Id. at 439–44. 605 Cotter, 193 F. Supp. 3d at 1030. 606 Cotter v. Lyft, Inc., No. 13-cv-04065-VC, 2017 U.S. Dist. LEXIS 38256, at 1 (N.D. Cal. Mar. 16, 2017) (grant- ing motion for final approval of settlement). 607 No. 15-cv-05128-JSC, 2017 U.S. Dist. LEXIS 10629 (July 10, 2017). 608 Order denying defendant’s motion for summary judgment), https://scholar.google.com/scholar_case?case= 3641046346756373585&hl=en&as_sdt=6&as_vis=1& oi=scholarr (accessed Dec. 1, 2017). See Cyrus Farivar, GrubHub trial may finally answer contractor vs. employee quandary, arSteChnICa, June 30, 3017, https://arstech- nica.com/tech-policy/2017/06/grubhub-trial-may-finally- answer-contractor-vs-employee-quandary/ (accessed July 2, 2017). 609 82 F. Supp. 3d 1133, 1148 (N.D. Cal. 2015).

80 terminated by Postmates for similar fraudulent behavior.614 In addition, the court’s analysis of Grub- hub’s right to control demonstrated that that right is arguably less extensive than that of TNCs vis-à-vis their drivers. For example, Grubhub did not require the plaintiff to undergo any specific training or orien- tation, to sign up to provide service within a specific timeframe in order to remain active on the service, nor to follow prescribed routes to reach a restaurant or make a delivery.615 The court rejected Grubhub’s argument that mutual at-will employment weighs against an employer–employee relationship under California law, but found that under the plaintiff’s specific circumstances, Grubhub’s right to termi- nate at will was a neutral factor in the right-to- control analysis.616 Of additional interest is the fact that the court held that despite the fact that food delivery was not the primary part of Grubhub’s regu- lar business, the fact that it was part of Grubhub’s regular business was a factor in favor of a finding of an employment relationship. However, the fact that the food delivery was not Grubhub’s only business was an overriding factor in the court’s distinguishing two other delivery cases in which the drivers were held to be employees rather than independent contractors.617 Finally, in its conclusion, the court suggested its dissatisfaction in having to classify the plaintiff either as an employee (entitled to all the rights thereof) or as an independent contractor (with no employment rights whatsoever).618 At least some analysts differed on whether the opinion was significant and could affect TNC litiga- tion or whether the opinion would be of limited prec- edential value given the court’s obvious opinion of the The court found that other factors weighed in favor of finding that the drivers are independent contrac- tors, but determined that those factors were not dispositive in that regard. These included that the drivers supply their own equipment and are not required to wear uniforms, are not required to work in a particular location once they log on and may perform other delivery services, and that the service agreement expressly provided that the plaintiff was an independent contractor. The bench trial began on September 5, 2017, and ended on October 30, 2017. During the trial, the judge reportedly stated that the right of Grubhub to termi- nate the plaintiff at will was of inordinate impor- tance, placing a heavy burden on the defendant, and appeared skeptical of the argument that delivery was not a core part of Grubhub’s business. The judge also reportedly referred to the agreement that acknowl- edged the plaintiff’s independent contractor status as a contract of adhesion, and stated that the party’s belief about his or her independent contractor status is the least important factor in determining employ- ment classification.610 Although the plaintiff’s attor- ney had filed a notice with the court of the pending Dynamex decision, suggesting that the Grubhub deci- sion should perhaps be put on hold because Califor- nia might be adopting a test other than Borello for employment status,611 in February 2018 the court issued an opinion holding that under the Borello test, Lawson was an independent contractor, not an employee of Grubhub:612 While some factors weigh in favor of an employment relation- ship, Grubhub’s lack of all necessary control over Mr. Lawson’s work, including how he performed deliveries and even whether or for how long, along with other factors persuade the Court that the contractor classification was appropriate for Mr. Lawson during his brief tenure with Grubhub.613 The “other factors” apparently include the fact that the plaintiff was credibly accused of gaming the Grubhub app to claim more pay than he was in fact entitled to, that he had not been a credible witness concerning that behavior, and that he had also been 610 Ben Hancock, At Trial’s Close, GrubHub Faces a Skeptical Judge, the reCorder, Oct. 30, 2017, https:// www.law.com/therecorder/sites/therecorder/2017/10/30/ at-trials-close-grubhub-faces-a-skeptical-judge/ (accessed Nov. 13, 2017); Richard Meneghello, A Comprehensive Review Of The Grubhub Trial Closing Arguments, GIG emPloyer bloG, Nov. 1., 2017, https://www.fisherphillips. com/gig-employer/a-comprehensive-review-of-the- grubhub-trial#page=1 (accessed Nov. 1, 2017). 611 Steingart, supra note 362. 612 Grubhub, No. 15-cv-05128-JSC, 2018 U.S. Dist. LEXIS 21171, (N.D. Cal. Feb. 8, 2018) (Opinion), https:// www.scribd.com/document/371089977/GrubHub-vs- Lawson-Ruling#download&from_embed (accessed Feb. 9, 2018). 613 Id. at 1. (emphasis added). 614 Id. at 12–17. 615 Id. at 18–22. 616 Id. at 22–25 (emphasis added). 617 Id. at 28–33. 618 In its conclusion, the court stated: Under California law whether an individual perform- ing services for another is an employee or an indepen- dent contractor is an all-or-nothing proposition. If Mr. Lawson is an employee, he has rights to minimum wage, overtime, expense reimbursement and workers compen- sation benefits. If he is not, he gets none. With the advent of the gig economy, and the creation of a low wage work- force performing low skill but highly flexible episodic jobs, the legislature may want to address this stark dichotomy. In the meantime, the Court must answer the question one way or the other. Based on what the Court observed at trial and the facts found, and after applying the Borello test, the Court finds that during the four months Mr. Lawson performed delivery services for Grubhub he was an independent contractor. Since he was not an employee, he cannot prevail on his individual Labor Code or PAGA claims. Accordingly, judgment must be entered in favor of Grubhub and against Mr. Lawson. Id. at 33.

81 Uber is no more a “technology company” than Yellow Cab is a “technology company” because it uses CB radios to dispatch taxi cabs, John Deere is a “technology company” because it uses computers and robots to manufacture lawn mowers, or Domino Sugar is a “technology company” because it uses modern irrigation techniques to grow its sugar cane. . . . If, however, the focus is on the substance of what the firm actu- ally does (e.g., sells cab rides, lawn mowers, or sugar), it is clear that Uber is most certainly a transportation company, albeit a technologically sophisticated one.622 The court further found that “it is obvious drivers perform a service for Uber because Uber simply would not be a viable business entity without its driv- ers.”623 The court then reviewed various ways in which Uber exercises control over its drivers, includ- ing fare-setting and prohibiting drivers from solicit- ing rides from Uber riders. The court noted that the Yellow Cab Coop. makes it clear that the Uber drivers are presumptive employees, as the reasoning in that case “applies even more forcefully here.”624 The court reiterated the standard for granting summary judgment on the question of employment status: Uber may only obtain summary judgment if all facts and evidentiary inferences material to the employee/independent contractor determination are undisputed, and a reasonable jury viewing those undisputed facts and inferences could reach but one conclusion—that Uber’s drivers are indepen- dent contractors as a matter of law. See Alexander, 765 F.3d at 988. The Court explained at the hearing on this matter that this is a “pretty tough standard to meet,” Oral Arg. Tr. at 6:15, and it is one that Uber has failed to meet here.625 The court then reviewed the material facts rele- vant to the primary Borello factor of right to control that were in dispute: whether Uber can fire drivers at will; whether drivers are in fact free to work as much or as little as they like and remain on the platform; whether Uber significantly controlled the manner and means of service through instructions concern- ing aspects such as driver wardrobe and music played in the car, and whether such instructions were suggestions or requirements; whether the customer rating system provides pervasive monitoring of driver behavior; and the extent of Uber’s control over drivers when they report to work. The court also found that a number of secondary Borello factors also supported a finding of an employment relationship. Razak v. Uber Technologies., Inc.626—Razak involved litigation in which a district court found that the plaintiff’s lack of credibility. In any event, plaintiff’s counsel indicated that an appeal would be filed.619 O’Connor v. Uber Technologies, Inc.620—This 2015 opinion is the first in a series of related actions that were stayed pending the Ninth Circuit consolidated appeal discussed previously. In this relatively early case, plaintiffs sued for benefits under the California Labor Code, arguing that they were employees, not independent contractors. Uber moved for summary judgment, arguing that as a matter of law, plaintiffs were independent contractors. The court denied Uber’s motion, holding that (a) plaintiffs were Uber’s presumptive employees because they “perform services” for Uber’s benefit, (b) employment classifi- cation under California law is a mixed question of fact and law that typically must be decided by a jury, and (c) that a number of material facts in the instant case remained in dispute.621 The O’Connor court’s review of California law was very similar to that in Cotter, described previously. The O’Connor court also cited Air Couriers as an example of a California case where individual drivers who determined their own schedules and decided when and how long to work were nonetheless determined to be employees because of the degree of control exercised over them when they did decide to work. Notably the court rejected Uber’s argument that it was not a transportation company: 619 Compare, e.g., Cyrus Farivar, Grubhub drivers are contractors—not employees—judge rules, arSteChnICa, Feb. 8, 2018 (raising doubts about the opinion’s precedential value), https://arstechnica.com/tech-policy/2018/02/grub- hub-drivers-are-contractors-not-employees-judge-rules/ (accessed Feb. 9, 2018) with Joel Rosenblatt, GrubHub Drivers Ruled Contractors in Gig-Economy Milestone, bloomberG, Feb. 8, 2018 (suggesting opinion boded well for TNCs), https://www.bloomberg.com/news/articles/2018-02- 08/grubhub-drivers-are-contractors-judge-rules-in- bellwether-suit (accessed Feb. 9, 2018). 620 O’Connor v. Uber Tech, 82 F. Supp. 3d 1133 (N.D. Cal. 2015). The related order denying Uber’s motion to compel arbitration, O’Connor v. Uber Tech, 150 F. Supp. 3d 1095, is covered in the discussion, supra, of the pending Ninth Cir- cuit appeal. The somewhat tangled history of this litigation is not particularly germane to legal analysis for purposes of transit agency risk assessment. It is recounted, however, by the district court in the order denying plaintiffs’ motion for preliminary approval of the proposed settlement, O’Connor v. Uber Techs., Inc., 201 F. Supp. 3d 1110, 1113–16 (N. D. Cal. 2016). The proposed settlement would have released claims from numerous lawsuits, and for drivers not included in the specific lawsuits being settled. Id. at 1116–20. Whereas the two specific cases proposing to be settled, O’Connor and Yucesoy were limited to expense reimburse- ment and payment of tips, the release under the proposed settlement would have covered all drivers in Massachu- setts and California “to release all claims based on or rea- sonably related to the employment misclassification claim, i.e., overtime, minimum wage, meal and rest breaks, and workers’ compensation.” Id. at 1119. 621 O’Connor, 82 F. Supp. 3d at 1135. 622 Id. at 1141–42. 623 Id. at 1142. 624 Id. at 1144. 625 Id. at 1148. 626 No. CV 16-573, 2017 U.S. Dist. LEXIS 148087 (E.D. Pa. Sept. 13, 2017) (Memorandum Re: Defendant’s Motion for Partial Summary Judgment), https://www.paed.uscourts. gov/documents/opinions/17D0649P.pdf (accessed October 18, 2017).

82 the employer. In examining the requirements to facially plead the fourth factor, the court—noting that the parties’ actual relationship, despite contrac- tual language, may be the conclusive factor—discussed a District of Columbia Court of Appeals case involv- ing a larcenous home deliveryman.630 The Search court cited the facts about the deliverymen in Schecter that led that court to conclude that a reasonable jury could find that the deliverymen were employees, noting the similarities to Uber drivers. The court noted: Here, Plaintiff has alleged that Uber controls the rate of refusal of ride requests, the timeliness of the drivers’ responses to requests, the display on vehicles of its logo, the frequency with which drivers may contact passengers, the drivers’ interactions with passengers (including how they accept tips and collect fares), and the quality of drivers via its rating system. . . . Taking these allegations as true, a reasonable fact-finder could conclude that Uber exercised control over [the driver] in a manner evincing an employer- employee relationship.631 The court dismissed as inapposite a taxicab case632 cited by Uber in support of its argument that the driver was an independent contractor. A distinguishing factor between Search and later cases is that in Search, Uber had apparently not yet decided to rely on its arbitration agreement to avoid litigation. 3. Federal Regulatory Proceedings Uber includes an arbitration policy in the employment agreement with its software engineers that is analogous to the policy in the driver agree- ments. An Uber engineer brought a complaint to the NLRB concerning the agreement. The original complaint alleged that Uber’s agreement was facially unlawful because it required employees to waive their rights to pursue class action claims and because employees would reasonably understand the agreement to prohibit them from filing unfair labor practice charges. The NLRB stayed proceed- ing on the facial allegation pending the expected Supreme Court ruling in Murphy Oil. However, the NLRB ALJ did find the agreement violated 8(a)(1) of the NLRA on the second ground. The ALJ issued plaintiffs had complied with the arbitration opt-out procedures in Uber’s service agreement and there- fore denied Uber’s motion to enforce arbitration. Plaintiffs alleged violations of the FLSA (failure to pay minimum wage, overtime, and “free and clear wages”), as well as violations of the Pennsylvania Minimum Wage Act and Wage Payment and Collec- tion Law. The overtime claims raised the issue of whether an UberBLACK driver is working for purposes of the FLSA when on-call, that is, logged in to the Uber app. The court held that TNC drivers’ time logged onto the TNC platform waiting for rides may, as a matter of law, be held to be compensable overtime under the FLSA, provided that sufficient facts are pleaded and evidence presented. The court denied Uber’s motion for partial summary judgment and directed the parties to complete discovery on the issue of whether the plaintiffs are employees or independent contractors under the FLSA. Search v. Uber Technologies.627—This case involved a motion to dismiss tort claims against Uber arising from a knife attack on the plaintiff by an Uber driver. Before considering the viability of the vicarious liability tort claim as pleaded (discussed infra with other tort cases), the court considered the threshold question of whether Uber was, or presented itself as, the driver’s employer. The court recited the District of Columbia’s five-factor test in determining whether an employer–employee relationship exists, noting that of those factors right to control—not the actual exercise of control—is usually determinative.628 The court concluded that applying those five factors to the facts pled by the plaintiff, the court could not determine as a matter of law that the plaintiff was an independent contractor. Facts meet- ing the first three factors were sufficiently pled by illustrating (a) Uber’s screening procedures (vis-à- vis involvement in selection and engagement of the employee); (b) Uber’s weekly payment of drivers, rather than allowing them to collect fares and tips from the passengers; and (c) Uber’s “broad latitude to terminate employees who fail to comply with the company’s standards.”629 The court apparently viewed the allegation that Uber is a car service to be sufficient to cover the fifth factor, whether the employee’s work is part of the regular business of 627 128 F. Supp. 3d 222 (D. D.C. 2015). 628 Id. at 231. 629 Id. at 232. 630 Schecter v. Merchants Home Delivery, Inc., 892 A. 2d 415 (D.C. 2006). 631 Search, 128 F. Supp. 3d at 233. 632 Ames v. Yellow Cab of D.C., No. 00-3116, 2006 U.S. Dist. LEXIS 67788 (D.D.C. Sept. 21, 2006).

83 insurance, but also for unemployment compensation, minimum wage, overtime, and benefits.636 California Labor Commissioner.—In 2015, the Commissioner addressed a complaint alleging that a former Uber driver was owed wages, reimburse- ment of expenses, liquidated damages for Uber’s failure to pay the required minimum wage, and penalties for failure to pay wages when they were due.637 In the legal analysis, the Commissioner noted the inference of employment under California law “if personal services are performed as opposed to business services,” citing ten factors established under Borello for consideration in making the deter- mination of whether an employment relationship exists.638 The Commissioner also noted that the parties’ belief whether there is an employment rela- tionship, while relevant, is not determinative. The Commissioner discussed Yellow Cab Coop., in which cab drivers were found to be employees “based on circumstances very similar to those of the instant matter.”639 The factors highlighted by the Commis- sioner were lack of importance of the fact that the driver owns the vehicle used to perform the work, the fact that the plaintiff ’s work was integral to the defendants’ business (which would not exist without the drivers), the defendants’ pervasive involvement in every aspect of the operation, the defendants’ control over the plaintiff ’s rate of pay, and the lack of any managerial skill in the plaintiff ’s work for the defendant. However, because the plaintiff failed to provide sufficient evidence to support her claim for additional wages and minimum wage, the Commis- sioner only awarded the reimbursable expenses, plus interest. California Employment Development Department (EDD).—It appears that in more than one instance, EDD has reportedly created a questionnaire specific to Uber drivers, and determined that a former Uber driver was an employee and thereby entitled to unemployment compensation. A 2014 award was upheld both by an ALJ and the California Unem- ployment Insurance Appeals Board. Illustrating the fact-dependent nature of these cases, the EDD has an order containing both cease and desist, and affirmative action components.633 4. State Cases and Regulatory Proceedings While it appears that many of the TNC driver actions related to employment classification have been brought in federal rather than state court,634 drivers have also sought recovery of wages and other benefits, as well as damages for violations of state wage and hour requirements and fair credit report- ing acts, in state venues. The following discussion reviews several state regulatory decisions, the sole adjudicated state judicial action that was identified, and the apparently first arbitration decision that has been judicially confirmed. Alaska Department of Labor and Workforce Development.—The Department’s Workers’ Compen- sation Division brought Uber before the Alaska Work- ers’ Compensation Board, arguing that Uber was misclassifying driver employees as independent contractors in violation of the Alaska Workers’ Compensation Act. Uber entered into a settlement agreement with the state to pay $77,925 to the state and stop operating in Alaska unless or until Uber complies with state law.635 However, the subsequently enacted Alaska TNC statute relieves TNCs of employer responsibilities, not only for workers’ compensation 633 The ALJ ordered Uber to: (1) Cease and desist from: (a) Maintaining a dispute resolution agreement that employees would reasonably believe bars or restricts them from filing unfair labor practice charges with the NLRB. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed to them by Section 7 of the Act. (2) Take the following affirmative action necessary to effectuate the policies of the Act: (a) Rescind the dispute resolution agreement in all of its forms, or revise it in all of its forms to make clear to employees that it does not bar or restrict them from filing charges with the NLRB. (b) Notify all current and former employee-software engineers who were required to sign or otherwise become bound to the dispute resolution agreement in any form that it has been rescinded or revised and, if revised, provide them a copy of the revised agreement. Uber Techs., Inc., N.L.R.B. Case 20–CA–181146, JD(SF)-24-17, June 13, 2017, accessible from https://www. nlrb.gov/cases-decisions/weekly-summaries-decisions/ summary-nlrb-decisions-week-june-12-16-2017 (follow case link) (accessed Aug. 5, 2017). 634 Izvanariu, supra note 573 at 135, n. 9. 635 Press Release, Uber Agrees to Stop Worker Misclas- sification in Alaska, Dep’t of Labor and Workforce Devel- opment (Sept. 3, 2015), http://labor.alaska.gov/news/2015/ news15-38.pdf. 636 alaSka Code § 28.23.080, Limitations on transporta- tion network companies (2017). 637 Berwick v. Uber Techs., Inc., No. 11-46739 EK, 2015 WL 4153765, at *10 (Cal. Labor Comm. June 3, 2015) (finding that Uber driver was employee), appeal docketed, No. A146460 (Ct. App. June 16, 2015); included in O’Connor settlement. 638 Id. at 4–5. 639 Id. at 5, citing Yellow Cab Cooperative v. Workers Compensation Appeals Bd., 226 Cal. App. 3d 1288 (Cal. Ct. App. 1991).

84 claimants to be employees of the employer, Uber Technologies Inc. and the employer liable for contri- butions for claimant and others similarly situated as of January 1, 2014.” The ALJ also overruled Uber’s objection that the claimants and all others similarly situated are independent contractors.643 In the findings of fact, the ALJ reviewed elements of the relationship between the drivers and Uber: Uber’s onboarding process; fringe or other benefits; required equipment and associated costs; claimants’ provision of ride services under the Uber app; claim- ants’ rating/performance review; payment of fares, other earnings, and reporting of income taxes; Uber’s consideration of claimants’ requests for clean-up and repair costs, and other reimbursement; Uber’s process for addressing rider complaints against drivers; drivers’ ability to work for competing TNCs; and drivers’ ability to use sub-drivers. In her opinion, the ALJ noted that the relevant test under New York law for determining whether an employment relationship exists for purposes of unemployment insurance “is not dependent on any one fact, but that such relationship may be found where the putative employer exerts control over important aspects of the services provided even where certain evidence would support a contrary conclusion.”644 The ALJ found that the contracts designating the claimants as independent contrac- tors were adhesion contracts, drafted solely by Uber, with no negotiation allowed. Neither those contracts nor the claimants’ self-identification as independent contractors were controlling. Certain factors— setting their own work schedules, selecting their work areas, not being required to report absences, and not being provided fringe benefits—were indica- tive of independent contractor status, although not, as Uber argued, dispositive. However, other factors were more significant. The ALJ dismissed Uber’s assertion that it is not a transportation company (citing Uber’s actions and its own publication), noting that “as a transportation company, claimants’ role as Drivers was a crucial aspect of Uber’s opera- tion,” and referring to Uber’s involvement in various aspects of drivers’ service delivery. Prefatory to providing examples concerning Uber’s control over claimants’ vehicles, trip details, fares, billing, as well as monitoring of claimants’ performance, the ALJ stated: “Uber did not employ an arms’ length approach to the claimants as would typify an inde- pendent contractor arrangement. Uber remained also denied unemployment benefits to at least one former Uber driver.640 McGillis v. Department of Economic Opportunity.641 —The plaintiff, a former Uber driver, sought review of the conclusion of the Florida Department of Economic Opportunity that he was not an employee for the purpose of reemployment assistance. The Florida appellate court affirmed that the Florida Department of Economic Opportunity’s holding that Uber drivers are not employees within the meaning of chapter 443, Florida’s unemployment compensa- tion statute. The court relied primarily—but not exclusively—on the terms of the driver agreement that specified the driver as an independent contrac- tor and the driver’s autonomy in scheduling, terri- tory, and acceptance of individual ride requests. The court discussed the importance of “extent of control” as the main test under Florida law in deter- mining the existence of an employer–employee rela- tionship under Florida law. Applying the test requires determining whether control is exercised solely over the result or extends to the means of achieving the required result. The court cited to five cases under Florida law finding drivers and other workers to be independent contractors. No cases finding workers to be employees were cited. The court did not view Uber’s ability to deactivate the driver’s account based on passenger ratings, or the fact that Uber’s princi- pal business is to provide transportation, as mandat- ing a finding of employment. New York Unemployment Insurance Appeal Board.—In a decision combining six cases seeking awards of unemployment insurance,642 an ALJ with the New York State Unemployment Insurance Board sustained the state Department of Labor’s initial determination “holding the claimants [former Uber drivers], and all others similarly situated to 640 Chris Roberts, Another Uber Driver Awarded Unem- ployment Benefits, S.F. weekly, Mar. 4, 2016, https:// archives.sfweekly.com/thesnitch/2016/03/04/uber-driver- awarded-unemployment-benefits-first-known-case-in- state (accessed Nov. 6, 2017); Heather Somerville, Former Uber driver was an employee, rules California department, reuterS, Sept. 9, 2015, http://www.reuters.com/article/uber- tech-california-ruling/former-uber-driver-was-an- employee-rules-california-department-idUSL1N11 F1KT20150910 (accessed Nov. 6, 2017). See also, Izvana- riu, supra note 573 at 149–50. The 2014 award was con- firmed in State of Cal. Unemp’t Ins. Appeals Bd. v. Uber Techs., Inc., No. 5371509, at *2 (June 1, 2015), http://uber- lawsuit.com/Uber%20Case%20No.%205371509.pdf). 641 210 So. 3d 220 (Fla. Dist. Ct. App. 2017). 642 In the Matter of Uber Techs. Inc., A.L.J. Case No. 016-23858 (combined with A.L.J. Case Nos. 016-23494; 016-20367;016-19369; 016-20726; 016-19075), June 9, 2017, Opinion, https://www.manatt.com/Manatt/media/ Media/PDF/Newsletters/Employment/Uber-decision.pdf (accessed July 17, 2017). 643 Id. at 17. 644 Id. at 15, citing Matter of Concourse Ophthalmology Associates, P.C., 456 N.E.2d 1201, 60 N.Y.2d 734, 736 (N.Y. 1983).

85 Uber Technologies v. Y.E.651—This was the first case decided by an arbitrator, who decided in Uber’s favor—that an Uber driver was an independent contractor. A number of the arbitrator’s character- izations as to California law and as to the apparent relationship between Uber and its drivers appear to be at odds with those of courts—for example, Cotter and O’Connor—that have reviewed these issues. The arbitrator found that the applicable law was that set forth in Borello, and discussed both Borello and Ayala v. Antelope Valley Newspapers, Inc.652 (to the extent that case supplements Borello), and then applied the facts of the instant case to the Borello factors. The discussion of Borello was brief and focused more on that court’s treatment of secondary indicia than on the right-to-control analysis for which the case is commonly cited. The arbitrator also found that Ayala “provides greater guidance [than Borello] in how to apply the various standards to the case at hand.”653 The arbitrator’s review of the facts relied heavily on the testimony of Uber’s risk manager. For example, the review of “driver conduct” was based on the risk manager’s testimony on Uber’s Code of Conduct and as to the fact that Uber provides suggestions, not instructions to the driv- ers. The arbitrator dismissed the findings of the claimant’s expert evidence regarding Uber’s policies and control as interesting but having little weight in the arbitration. In concluding that the claimant was an indepen- dent contractor, the arbitrator first focused on the fact that the claimant was a livery partner of Uber’s as well as a driver, and concluded that such a person who is a livery company or has been hired by a livery company licensed with the State of California to drive on an Uber platform is not within Uber’s control, and Uber does not have the right to control that person. The arbitrator went on to conclude that Uber also does not control its drivers, basically taking at face value the testimony of Uber’s risk manager that Uber only provides suggestions to its drivers that do not have to be followed. Perhaps most significantly, the arbitrator found that Uber drivers are not supervised and can work as much or as little as they choose, a different conclusion than has been reached in other California forums. involved with the means by which claimants provided transportation services for its Riders.”645 The opinion concluded: Based on these aforementioned factors and current New York Labor Law, I find that while there are some indicia of claimant’s independence, the overriding evidence establishes that Uber exercised sufficient supervision, direction, and control over key aspects of the services rendered by claim- ants such that an employer–employee relationship was created [footnote omitted]. I, conclude, therefore, that the claimants, and others similarly situated, are/were employees of the employer, Uber. Accordingly, I, conclude that the employer is liable for contributions under the Labor Law.646 Oregon Bureau of Labor and Industries (BOLI).— In 2015, the Commissioner of BOLI issued an advi- sory opinion that stated that based on then-current information, Uber drivers are employees rather than independent contractors under Oregon law.647 The opinion reviewed the standard under Oregon law for the term employ, which is that of the FLSA: “to suffer or permit to work.”648 Whether a business “suffers or permits” a person to work turns on whether the person is, as a matter of economic real- ity, dependent on the business. BOLI applies the FLSA economic realities test. Under this analysis, independent contractors “are workers who exercise economic independence in the operation of their own businesses.”649 The opinion then applied the facts taken from California administrative and court cases to the six economic realities test factors. The opinion concluded: These six factors from the economic realities test illustrate how Uber drivers are not operating their own separate businesses with the degree of autonomy one expects with an independent contractor. To the contrary, the rigorous hiring process, the highly controlled directions as to how work is to be performed and at what price, the expectation of long term employment, the insignificant investment of the driver when compared to the massive infrastructure provided by Uber and the integral nature of the driver’s work to the business are all characteristic of an employ- ment relationship.650 645 In the Matter of Uber Techs. Inc. at 15–19. 646 Id. at 19. The ALJ noted that “Uber’s citation to McGill v. Dep’t of Econ. Opportunity, 210 So.3d 220 (3d DCA 2017) where the court, applying Florida Law, held that certain Uber drivers were independent contractors is non-controlling.” Id. fn 25. 647 Advisory Opinion of the Commissioner of the Bureau of Labor and Industries of the State of Oregon, Regarding: The Employment Status of Uber Drivers, Oct. 14, 2015 [2015 BOLI Advisory Opinion], http://www.oregon.gov/ boli/SiteAssets/pages/press/101415%20Advisory%20 Opinion%20on%20the%20Employment%20Status%20 of%20Uber%20Drivers.pdf (accessed Aug. 17, 2017). 648 ORS 653.010(2). 649 2015 BOLI Advisory Opinion at 2. 650 Id. at 4. 651 In the Matter of the Arbitration Between Y.E. v. Uber Techs., Inc., ADRS Case No. 15-6878-MDM (November 23, 2016); See Uber v. Y.E., Case No. BS166561 (Cal. Superior Court, Feb. 21 2017) (Arbitration award Confirmed), http://pdfserver.amlaw.com/ca/uber_petition.pdf. 652 59 Cal. 4th 522, 327 P.3d 165, 173 Cal. Rptr. 3d. (2014). 653 In re: Y.E. v. Uber Techs., Inc., ADRS Case No. 15-6878-MDM, at 5.

86 not a digital service.657 The question arose in connec- tion with an action by Spanish taxi drivers accusing Uber of misleading practices and unfair competi- tion. In order to resolve the questions at issue, the advocate general considered “whether Uber’s activ- ity must be regarded as a whole comprising, first, a supply whereby passengers and drivers are connected with one another by means of the elec- tronic platform and, secondly, the supply of trans- port in the strict sense, or whether these two supplies must be regarded as two separate services.”658 In examining those questions, the EUAG analyzed Uber’s control over transport service delivery. Although the EUAG’s opinion focused on whether Uber should be classified as a transport service, the analysis is analogous to that engaged in to deter- mine employment classification.659 The EUAG concluded that Uber’s operating system of connect- ing drivers and passengers has no independent economic value without the actual transport of passengers by those drivers and therefore cannot be considered an information society service subject to European Union (EU) law. In December 2017, the European Court of Justice itself issued its judgment in the case, also finding that Uber provides transport services under EU law, 5. International Proceedings Several international proceedings were identified that addressed the employment classification of Uber drivers, and—as either a threshold or ancillary matter—Uber’s contention that it is a technology firm, not a transportation services provider. In 2017, both the Suva (the Swiss public liability insurer) and a Brazilian labor court ruled in favor of Uber drivers seeking employment benefits.654 In 2018, however, a French labor tribunal agreed with Uber that it was in the business of intermediation rather than transportation, agreeing that a complaining driver was an independent contractor. An appeal was possible.655 [E-18] Asociación Profesional Elite Taxi v. Uber Systems Spain SL.—In May 2017, the European Court of Justice’s advocate general (EUAG)—whose opinion is not binding but is often followed by the judges in the European Court of Justice656—issued a statement that Uber should be regulated as a transport company, 654 In January 2017, the Suva ruled that an Uber driver was an employee for purposes of social security contribu- tions. The rationale was reportedly that “prices are con- trolled by Uber, not the driver; and in the face of Uber’s ‘comprehensive control’ over its drivers, they have no autonomy. Drivers have to obey all directives and instruc- tions, or face serious consequences.” Richard Chirgwin, Switzerland says Uber’s an employer, sends social security bill, the reGISter, Jan. 6, 2017, https://www.theregister. co.uk/2017/01/06/switzerland_says_ubers_an_employer_ sends_social_security_bill/ (accessed Aug. 21, 2017). In Feb- ruary 2017, the Brazilian court “ordered Uber to pay one driver around 30,000 reais ($10,000) in compensation for overtime, night shifts, holidays and expenses such as gaso- line, water and candy for passengers” and apparently suggested that the government should treat Uber as a transportation company rather than a tech firm. Brazil judge rules Uber drivers are employees, deserve benefits, buS. InS., Feb. 14, 2017, http://www.businessinsurance.com/ article/20170214/NEWS08/912311909/Brazil-judge-rules- Uber-drivers-are-employees-deserve-benefits?utm_ campaign=BI20170214DailyBriefing&utm_medium=email &utm_source=ActiveCampaign (accessed Feb. 14, 2017). 655 French labor court backs Uber in driver contract dis- pute, reuterS, Feb. 8, 2018, https://www.reuters.com/article/ us-france-uber/french-labor-court-backs-uber-in-driver- contract-dispute-idUSKBN1FS2DZ (accessed Feb. 9, 2018). [E-18] 656 James Titcomb, Uber dealt setback in European court over transport laws, the teleGraPh, May 11, 2017, http://www.telegraph.co.uk/technology/2017/05/11/uber- dealt-setback-european-court-transport-laws/ (accessed Aug. 21, 2017). 657 Opinion of Advocate General Szpunar, Case C-434/15, Asociación Profesional Elite Taxi v Uber Systems Spain SL, 11 May 2017, http://curia.europa.eu/juris/document/docu- ment_print.jsf?doclang=EN&text=&pageIndex=0&part=1 &mode=req&docid=190593&occ=first&dir=&cid=666382 (accessed Aug. 21, 2017); Advocate General’s Opinion in Case C-434/15 Asociación Profesional Elite Taxi v Uber Systems Spain, SL, 11 May, 2017, Press Release, https:// curia.europa.eu/jcms/upload/docs/application/pdf/2017-05/ cp170050en.pdf (accessed Aug. 21, 2017). See also, Stepha- nie Bodoni & Adam Satariano, Uber Loses EU Court Fight as Judges Take Aim at Gig Economy, bloomberG, Dec. 20, 2017, https://www.bloomberg.com/news/articles/2017-12- 20/uber-suffers-setback-at-top-eu-court-in-clash-with- cabbies (accessed Dec. 23, 2017). 658 Opinion of Advocate General Szpunar, Case C-434/15, Asociación Profesional Elite Taxi v Uber Systems Spain SL, 11 May 2017, ¶ 39, http://curia.europa.eu/juris/document/ document_print.jsf?doclang=EN&text=&pageIndex=0&pa rt=1&mode=req&docid=190593&occ=first&dir=& cid=666382 (accessed Aug. 21, 2017). 659 The AG rejected Uber’s characterization of itself as simply matching supply to demand: “Uber actually does much more than match supply to demand: it created the supply itself. It also lays down rules concerning the essen- tial characteristics of the supply and organises how it works.” Id. at ¶ 43. The AG then described the ways that Uber controls the terms and conditions of transport deliv- ery, concluding: “Uber therefore controls the economically significant aspects of the transport service offered through its platform.” Id. at ¶ 51.

87 questions of whether or not Uber is in the transpor- tation business or whether the drivers would be enti- tled to protections under U.S. employment statutes. However, certain portions of the tribunal’s opinion do relate to factors that are relevant for determining employment classification under U.S. law. The tribunal’s review of the facts under which drivers may be considered to be employed as work- ers included the payment process, terms between Uber and the passenger, terms between Uber and the driver, driver recruitment/“onboarding,” drivers’ obligations, and instruction, management, and control/preserving the integrity of the platform. That last topic was the crux of the case, with the claimants arguing that Uber instructs, manages, and controls the drivers, while Uber maintains that “to the extent that documentary evidence points to them guiding or directing drivers’ behaviour, it merely reflects their common interest in ensuring a satisfactory ‘rider experience’ and (to adopt a formula repeatedly employed by Ms Bertram) ‘preserving the integrity the platform.’”665 The tribu- nal also reviewed drivers’ rights and freedoms and Uber’s use of language generally, for example, publicity material. After a lengthy review of appli- cable UK case law, the tribunal set forth its analysis. As to employment status, the tribunal focused on the drivers’ status when the app is turned on and rejected the notion that driver and passenger agree- ments should be controlling as to Uber’s status as a transportation services provider.666 In addition, the tribunal, referencing O’Connor, rejected Uber’s argument that it is not in business as a supplier of transportation services, as well as the argument that the drivers are small rather than merely an intermediation service that qualifies as an information society service.660 Uber France SAS.—In July of 2017, the EUAG took the position that members of the EU may prohibit and punish the illegal exercise of a trans- port activity without notifying the Commission in advance of their draft law.661 The underlying legal issues concerning construction of EU law are far afield from the issues presented in U.S. employment and disability cases in which Uber and other TNCs have argued that they are not transportation compa- nies. However, it may be of interest that the EUAG reiterated his conclusion that Uber’s activities “without question fall within the field of trans- port.”662 It is also notable that Uber responded to the July opinion by saying that it only operates in France with licensed cab drivers.663 Aslam & Farrar v. Uber BV & Others.—In 2016, a United Kingdom (UK) employment tribunal found that the claimants were employed as workers within three UK employment-related laws, entitled to mini- mum wage and overtime as explained by the tribu- nal; the finding was limited to the specific facts of the claim.664 Much of the opinion was devoted to issues particular to UK law that have no relevance to 660 Judgment of 20 Dec. 2017, Asociación Profesional Elite Taxi v Uber Systems Spain SL, C-434/15, ECLI:EU:C: 2017:981, ¶¶ 39 and 40, http://curia.europa.eu/juris/docu- ment/document.jsf;jsessionid=9ea7d0f130de9d684786d28f 480980f2ddd8791fcbb5.e34KaxiLc3eQc40LaxqMbN4Pa NyPe0?text=&docid=198047&pageIndex=0&doclang=EN &mode=req&dir=&occ=first&part=1&cid=821995; Judg- ment in Case C-434/15, Asociación Profesional Elite Taxi v Uber Systems Spain SL, Press Release No 136/17, 20 Dec. 2017, https://curia.europa.eu/jcms/upload/docs/application/ pdf/2017-12/cp170136en.pdf. 661 Opinion of Advocate General Szpunar, Case C-320/16, Uber France SAS, 4 July 2017, http://curia.europa.eu/juris/ document/document.jsf?text=&docid=192325&pageIndex= 0&doclang=en&mode=req&dir=&occ=first&part= 1&cid=673002 (accessed Aug. 22, 2017); Advocate General’s Opinion in Case C-320/16, Uber France SAS, Press Release No 72/17, 4 July 2017, https://curia.europa.eu/jcms/upload/ docs/application/pdf/2017-07/cp170072en.pdf (accessed Aug. 22, 2017). 662 Opinion of Advocate General Szpunar, Case C-320/16, Uber France SAS, 4 July 2017, ¶ 40, http://curia. europa.eu/juris/document/document.jsf?text=&docid= 192325&pageIndex=0&doclang=en&mode=req&dir= &occ=first&part=1&cid=673002 (accessed Aug. 22, 2017). 663 Julia Fioretti, New EU court blow to Uber over French taxi case, reuterS, July 4, 2017, https://www.reuters.com/ article/us-uber-court-eu/new-eu-court-blow-to-uber-over- french-taxi-case-idUSKBN19P0RH (accessed Nov. 6, 2017). 664 Aslam v Uber BV, ET/2202550/15, 28 October 2016, https://www.judiciary.gov.uk/wp-content/uploads/2016/10/ aslam-and-farrar-v-uber-employment-judgment- 20161028-2.pdf (accessed Aug. 21, 2017). 665 Id. at 13, ¶ 47. 666 The tribunal found: We have reached the conclusion that any driver who (a) has the App switched on, (b) is within the territory in which he is authorised to work, and (c) is able and will- ing to accept assignments, is, for so long as those condi- tions are satisfied, working for Uber under a ‘worker’ contract and a contract within each of the extended definitions. . . . Any organisation (a) running an enter- prise at the heart of which is the function of carrying people in motor cars from where they are to where they want to be and (b) operating in part through a company discharging the regulated responsibilities of a PHV operator, but (c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services (through UBV or ULL), and (d) resorting in its documentation to fictions, twisted language and even brand new terminology, merits, we think, a degree of scepticism. (citations omitted). Id. at 26–27, ¶ 87.

88 to passengers, or requiring drivers to accept at least 80% of trip requests to maintain account status.672 B. Disability Accessibility Uber and Lyft have taken the position that they are not public accommodations and that therefore the ADA does not apply to them.673 As discussed further in this digest, this position has been rejected by at least one federal district court674 and has been challenged by the DOJ. The National Council on Disability (NCD) has asserted that TNCs have failed to provide accessi- ble services for people with disabilities, citing two lawsuits claiming that UberX does not provide acces- sible service to persons with mobility disabilities. NCD also noted reports of longer wait times and higher fares in Washington D.C. for the WAVs to which Uber refers would-be passengers with mobility disabilities. Accord- ingly, the NCD recommended that DOJ “issue regula- tions for privately funded transit to provide accessible transportation options for people with disabilities.”675 businesses.667 The tribunal set forth thirteen consid- erations that—in addition to its foregoing facts and analysis—support its assessment that “Uber runs a transportation business. The drivers provide the skilled labour through which the organisation deliv- ers its services and earns its profits.”668 These consid- erations all went to Uber’s control over the drivers’ service delivery for Uber. Furthermore, the tribunal found that Uber was not entitled to rely on its docu- mentation because the tribunal found that the docu- mentation bore no relation to reality, and did not support a finding of an at-length contract between two independent business undertakings.669 In November 2017, in a decision that could affect federal and state regulators in the United States,670 the employment appeal tribunal upheld the employ- ment court decision.671 The appeal tribunal found that the employment tribunal had properly found the reality of the drivers’ situation controlling over the written contractual documentation. A point of emphasis in the appeal tribunal’s decision was the imbalance of power between the parties. The appeal tribunal was also not persuaded by Uber’s arguments that the control it did exercise was required by the regulations, noting that Uber made numerous choices to exercise control beyond what may have been required by the governing regulations, such as not sharing passenger information with drivers and prohibiting drivers from providing their contact details 667 The tribunal noted: [I]t seems to us that the Respondents’ general case and the written terms on which they rely do not correspond with the practical reality. The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous. In each case, the ‘business’ consists of a man with a car seeking to make a living by driving it. Ms Bertram spoke of Uber assisting the drivers to “grow” their businesses, but no driver is in a position to do anything of the kind, unless growing his business simply means spending more hours at the wheel. Nor can Uber’s function sensibly be characterized as sup- plying drivers with “leads”. That suggests that the driver is put into contact with a possible passenger with whom he has the opportunity to negotiate and strike a bargain. But drivers do not and cannot negotiate with passengers (except to agree a reduction of the fare set by Uber). They are offered and accept trips strictly on Uber’s terms. Id. at 28, ¶ 90 (citations omitted). 668 Id. at 29, ¶ 92. 669 Id. at 30, ¶ 94. 670 Erin Mulvaney, What the UK’s Uber Driver Ruling Means for the Gig Economy, the reCorder, Nov. 10, 2017, https://www.law.com/therecorder/sites/therecorder/ 2017/11/10/what-the-u-k-s-uber-driver-ruling-means-for- the-gig-economy/?back=law (accessed Nov. 13, 2017). 671 Uber v. Aslam, Appeal No. UKEAT/0056/17/DA, Nov. 10, 2017, https://assets.publishing.service.gov.uk/media/ 5a046b06e5274a0ee5a1f171/Uber_B.V._and_Others_v_ Mr_Y_Aslam_and_Others_UKEAT_0056_17_DA.pdf (accessed Nov. 13, 2017). 672 Id. at 42–43, ¶ 113. 673 Casey (Dilemma), supra note 44, at 159–60. For addi- tional discussions of TNCs and the ADA, see Casey, (Loop- hole), supra note 106; Rachael Reed, Note & Comment: Disability Rights in the Age of Uber: Applying the Americans With Disabilities Act of 1990 to Transportation Network Companies, 13 Ga. St. L. Rev. 517 (2017); Heather Kelly, Uber’s services for the disabled lack actual cars, CNN money, May 3, 2016, http://money.cnn.com/2016/05/02/ technology/uber-access/ (accessed Feb. 16, 2017); Brian Muse, Uber’s ADA Conundrum, ADA Musings, May 28, 2015, https://adamusings.com/2015/05/28/ubers-ada-conundrum/ (accessed Aug. 19, 2017). 674 Ramos v. Uber Techs., Inc. and Lyft Inc., Civil Action No. SA-14-CA-502-XR, 2015 U.S. Dist. LEXIS 20914 (W.D. Tex. Feb. 20, 2015). 675 National Disability Policy: A Progress Report, National Council on Disability, Oct. 26, 2017, at 55, https://ncd.gov/ sites/default/files/NCD_A%20Progress%20Report_508.pdf. In support of the first point, NCD cited Equal Rights Center v. Uber Techs., Inc., 1:17-cv-01272 (D.D.C. June 28, 2017), which alleged Uber violated Title III and the District of Columbia Human Rights Act by denying wheelchair users full and equal enjoyment of Uber’s transportation service, https://equalrightscenter.org/wp-content/uploads/equal- rights-center-v.-uber-technologies-inc.-complaint.pdf, and Access Living of Metropolitan Chicago v. Uber Techs., Inc., No. 16-cv-9690 (N. D. Ill. Oct. 13, 2016), which asserted the applicability of the ADA to Uber. See also Non-Profit Access Living Asserts Civil Rights Claim in Federal Lawsuit against Uber, Press Release, https://www.accessliving.org/1410ga 676. In support of the second point, NCD cited Equal Rights Center Files Lawsuit Against Uber for Providing Services That Are Inaccessible to Wheelchair Riders, Press Release, June 28, 2017, https://equalrightscenter.org/press-releases/ equal-rights-center-files-lawsuit-uber-providing-services- inaccessible-wheelchair-riders/. In connection with its law- suit in the District of Columbia, the Equal Rights Center con- ducted a civil rights testing investigation in which it found that wheelchair users waited an average of eight times longer for a WAV to arrive than customers waiting for an UberX and paid fares that were twice as much as the UberX fares.

89 the public accommodation provision of the ADA could not be resolved at the motion to dismiss stage. Uber had not challenged the allegation that it was liable under the ADA’s specified public transporta- tion service provision, so the court did not address that allegation. The case was ultimately settled.680 The settlement provided for monetary relief to the named plaintiffs and extensive injunctive relief in three categories: “(1) providing notice to drivers; (2) providing remedies for and systematic support to riders with service animals to report incidents; and (3) enforcing Uber’s policy that drivers may not discriminate against riders with service animals.”681 However, denial of service by Uber drivers, albeit not condoned by Uber, has continued to be an issue.682 The National Federation of the Blind raised simi- lar complaints about Lyft’s service in 2015, after which the parties entered into a Confidential Struc- tured Negotiations Agreement to “negotiate enhance- ments to Lyft’s policies, practices, and procedures concerning transportation of blind and low-vision persons with Service Animals.” Those negotiations resulted in comprehensive changes to Lyft’s policies to ensure driver compliance with accessibility requirements concerning service animals.683 The research for this digest identified two actions in which courts denied TNC motions to dismiss ADA claims, but none in which disability claims against TNCs were fully litigated. 1. National Federation of the Blind of California v. Uber Technologies, Inc.676 National Federation of the Blind of California (NFBC) alleged that Uber has allowed its drivers to deny access to blind individuals and their guide dogs, in violation of the ADA, the California Unruh Civil Rights Act, and the California Disabled Persons Act. NFBC sought injunctive relief only. Standing issues aside,677 Uber’s position was that it is not a public accommodation and therefore not covered by the ADA. The DOJ filed a Statement of Interest in the liti- gation.678 In that statement, the DOJ made clear its position—without taking a position on whether Uber is a public accommodation—that the ADA applies under 42 U.S.C. § 12184 to private entities primarily engaged in providing transportation services, even if those entities are not public accom- modations or do not operate places of public accom- modation. In its statement, the DOJ discusses the application of 49 C.F.R. § 37.29 to taxi services and any other demand response service, including enti- ties that operate demand response service by contracting out the service. DOJ stated “an entity may operate a demand responsive system even if it does not itself provide transportation services, if it does so through a contractual relationship with another entity or even individual drivers. Indeed, as explained in the DOT guidance, while an entity may contract out its service, it may not contract away its ADA responsibilities.”679 DOJ also reviewed specific nondiscrimination requirements, including the obli- gation to accommodate service animals. The court denied Uber’s motion to dismiss, ruling that the question of whether Uber was covered under 676 103 F. Supp. 3d 1073 (N.D. Cal. 2015). 677 Uber argued that the NFBC’s suit would violate the sanctity of the arbitration agreements entered into by some of the NFBC’s members by allowing NFBC to litigate via their proxy. The court was not persuaded by this argument, since the NFBC was representing its unbound members. Id. at 1079. 678 Statement of Interest of the United States of Amer- ica, National Federation of the Blind of California v. Uber Techs., Inc., No. 3:14-cv-04086-NC (N.D. Cal. Dec. 23, 2014). 679 Id. at 5. 680 National Federation of the Blind of California v. Uber Techs., Inc., No. 3:14-cv-04086-NC (N.D. Cal. Feb. 5, 2015) (order granting final approval and attorneys’ fees). The case documents are available at http://dralegal.org/ case/national-federation-of-the-blind-of-california-et-al-v- uber-technologies-inc-et-al/. 681 National Federation of the Blind of California v. Uber Techs., Inc., No. 3:14-cv-04086-NC, at 5 (N.D.) Cal. July 13, 2016 (order granting motions to amend the complaint, con- ditionally certify class, and preliminary approval of class action settlement). The settlement terms are explained in some detail in the order. Id. at 6–7. 682 E.g., Uber Denied Ride Over Service Dog, Blind Couple Says, Nov. 7, 2017, http://boston.cbslocal.com/2017/ 11/07/uber-blind-man-dragged-ride-denied-service-dog/ (accessed Nov. 9, 2017). 683 Settlement Agreement and Release, accessible from http://dralegal.org/press/lyft-national-federation-blind- announce-comprehensive-accessibility-improvements- lyft-riders-travel-service-animals/#files (must fill out form); Lyft and the National Federation of the Blind Announce Comprehensive Accessibility Improvements for Lyft Riders Who Travel with Service Animals, Disability Rights Advo- cates, Apr. 3, 2017, http://dralegal.org/press/lyft-national- federation-blind-announce-comprehensive-accessibility- improvements-lyft-riders-travel-service-animals/.

90 Human Rights Law (NYCHRL)688 and the ADA. The factual allegations in the amended complaint include descriptions of Uber’s “tight control over its drivers and procedures,” the lack of WAVs in the Uber fleet, and the harm Uber’s growth has done to taxis. The amended complaint noted that the NYCHRL imposes a much stricter standard than either federal or state law, arguing that Uber’s liabil- ity under the NYCHRL should be determined sepa- rately and independently from Uber’s liability under state and federal law. In particular, Uber’s practice of limiting accessible service to UberWAV was alleged to be a violation of the NYCHRL regarding disparate impact on covered groups.689 As to the ADA, the amended complaint alleged that Uber operates a “travel service” under § 12181, and that Uber’s alleged practices denies full and equal enjoy- ment of Uber’s services in violation of Title III.690 Requested relief included an order requiring Uber to “to develop and implement a remedial plan to ensure full and equal access to its services for riders who require accessible transportation.”691 2. Ramos v. Uber Technologies, Inc., and Lyft Inc. Plaintiffs were individuals with disabilities who required wheelchairs. They alleged that Uber and Lyft do not provide WAVs, allow their drivers to deny service to disabled individuals, and provide no training or guidance to their drivers about meeting the requirements to meet the needs of disabled customers, thus violating § 12184. Both Uber and Lyft essentially—although differently—argued that plaintiffs must establish that they are or operate a place of public accommodation. The court dismissed Uber and Lyft’s respective arguments as a misreading of the statute.684 The court then explained the applica- bility of § 12184 and denied the motions to dismiss that were based on the public accommodation argu- ments.685 The court further held that the allegation that plaintiffs were denied services and were being discriminated against because of their disabilities in violation of Title III was sufficient to state a claim at the pleading stage. The case was settled.686 3. Brooklyn Center for Independence for the Disabled v. Uber Technologies, Inc.687 The Brooklyn Center for Independence for the Disabled alleged violations of the New York City 684 The court stated: “Uber and Lyft misread Title III - none of section 12184’s provisions require a plaintiff to establish that the defendant operates a place of public accommodation.” Ramos, Civil Action No. SA-14-CA- 502-XR, 2015 U.S. Dist. LEXIS 4166 at 7. The court spe- cifically discounted Uber’s argument (“Uber’s restrictive reading of Title III as governing only public accommoda- tions is contrary to its structure and its plain language.”), id., and that of Lyft (“In addition to being inconsistent with the statute’s plain language and structure, Lyft’s construction adding a public accommodation requirement to section 12184(b)(2) would render section 12184(b)(2) redundant and useless, given that a public accommoda- tion would already be subject to section 12182(b)(2).”), id. at 8–9. 685 Id. at 7–9. 686 Order (Mar. 24, 2015) (order to dismiss claims against Lyft requested by all parties due to settlement, granted); Joint Settlement Advisory to the Court (July 6, 2015) (settlement reached with Uber); Order (Aug. 4, 2015, pursuant to Joint Stipulation of Dismissal, order to dismiss without prejudice granted). 687 First Amended Complaint filed Nov. 2, 2017, (N.Y. Sup. Ct.), accessible from http://dralegal.org/case/ brooklyn-center-independence-disabled-bcid-et-al-v-uber- technologies-inc-et-al/#files. See Jonathan Stempel, Uber is sued over lack of wheelchair-accessible cars in NYC, reuterS, July 18, 2017, https://www.reuters.com/article/ uber-lawsuit/uber-is-sued-over-lack-of-wheelchair- accessible-cars-in-nyc-idUSL1N1K90YA (accessed Nov. 3, 2017). A federal action was subsequently filed, Case No. 1:2017cv06399 (S.D.N.Y. Aug. 22, 2017). 688 N.Y.C. Admin. Code § 8-107(4), § 8-107(17). § 8-107 (17) provides that an unlawful discriminatory practice is established when a policy or practice/group of policies or practices is demonstrated that has a disparate impact on any covered group. § 8-107(4)(a) provides: It shall be an unlawful discriminatory practice for any person, being the owner, lessee, proprietor, manager, superintendent, agent or employee of any place or provider of public accommodation because of the actual or perceived race, creed, color, national origin, age, gender, disability, marital status, partnership status, sexual orientation or alienage or citi- zenship status of any person directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof, or, directly or indirectly, to make any declaration, publish, circulate, issue, display, post or mail any written or printed com- munication, notice or advertisement, to the effect that any of the accommodations, advantages, facilities and privileges of any such place or pro- vider shall be refused, withheld from or denied to any person on account of race, creed, color, national origin, age, gender, disability, marital status, partner- ship status, sexual orientation or alienage or citizenship status or that the patronage or custom of any per- son belonging to, purporting to be, or perceived to be, of any particular race, creed, color, national origin, age, gender, disability, marital status, partnership sta- tus, sexual orientation or alienage or citizenship status is unwelcome, objectionable or not acceptable, desired or solicited. (emphasis added) 689 First Amended Complaint at 16–19; 21–22; 24–5; 30–32. 690 Id. at 32–33. 691 Id. at 34.

91 number of claims for fraud and misrepresentation have at least survived motions to dismiss or for summary judgment,695 no cases were identified that resulted in an actual decision against the TNC in such litigation. The primary issues raised in these private actions related to Uber’s gratuity practices and Uber’s safety claims, particularly in regard to the “Safe Ride Fees.” (At least some of the actions raised breach of contract claims, but those were related to the fraud and misrepresentation claims.) In August 2017, a federal district court granted preliminary approval to settlement of a putative class action, alleging Uber misled consumers about the quality of the background checks on its drivers and questioning whether all of the “safe rides” fees C. Violation of TNC Statute 1. Colorado Background Check Requirements In November 2017, the Colorado PUC issued an $8.9 million Civil Penalty Assessment Notice to Rasier for violations of background check requirements under the Colorado TNC statute. Following a referral from the Vail Police Department about an assault on a passenger, the PUC began an investigation into TNC driver histories and found both felony convictions that Uber’s background checks had failed to find and instances where it could not be confirmed that Uber had performed criminal background checks. In addi- tion to twelve felony convictions, seventeen major moving vehicle violations, and three interlock driver’s licenses (recent drunk driving convictions), the PUC found that the Uber background checks had failed to identify a number of driver aliases, including a convicted felon and habitual offender.692 No problems were identified with the small number of driver records furnished by Lyft as part of the investigation. The PUC director disputed Uber’s assertion that the company had reached out to the PUC, stating that Uber only provided the records under threat of daily civil penalties. In addition, the director disputed Uber’s characterization of the problem as a data-processing error, noting that he had been informed that some penalized drivers remained in the Uber system. The director also emphasized the superiority of fingerprint-based background checks over name-based background checks.693 D. Fraud/Misrepresentation/Unfair Competition/Privacy 1. Private Actions Taxicab interests brought a number of unsuccess- ful actions alleging TNC operations in violation of state and local tax regulations violated federal and state unfair competition statutes.694 Although a 692 PUC staff issues $8.9 million civil penalty assess- ment notice to Uber parent company for violations of driver qualification laws, News Release, Nov. 20, 2017, https:// drive.google.com/file/d/1HDZAhjiwt1WBxjN1BdHhazp95 YDTHoZK/view (accessed Nov. 21, 2017). 693 Tamara Chuang, Uber fined $8.9 million by Colorado for allowing drivers with felony convictions, other driver’s license issues, denV. PoSt, Nov. 20, 2017, http://www. denverpost.com/2017/11/20/uber-colorado-fine/ (accessed Nov. 21, 2017). 694 E.g., Phila. Taxi Ass’n, Inc. v. Uber Techs., Inc., Civ. Action No. 16-1207, 218 F. Supp. 3d 389 (E.D. Pa. Nov. 3, 2016) (also dismissed claim for attempted monopolization in violation of federal antitrust law and state law claim of tortious interfer- ence with present and prospective contractual relations); Greenwich Taxi, Inc. v. Uber Techs., Inc., 123 F. Supp. 3d 327 (D. Conn. Aug. 13, 2015); Yellow Group LLC v. Uber Techs., Inc., Case. No. 12 C 7967, 2014 U.S. Dist. LEXIS 94093 (N.D. Ill. July 10, 2014); Manzo v. Uber Techs., Inc., Case No. 13 C 2407, 2014 U. S. Dist. LEXIS 95106 (N.D. Ill. July 14, 2014). 695 Ehret v. Uber Techs., Inc., 68 F. Supp. 3d 1121 (N.D. Cal. 2014) (in case challenging Uber’s practices re 20% “gra- tuity fee,” order denying motion to dismiss claims under fraudulent, unfairness, and unlawful prongs of California’s Unfair Competition Law and § 1770(a)(5), (9), (14) of Con- sumers Legal Remedies Act; granting motion to dismiss claims under §§ 1770(a)(13) and 1770(a)(16) of Consumers Legal Remedies Act and for breach of contract); L.A. Taxi Coop., Inc. v. Uber Techs., Inc., 114 F. Supp. 3d 852, 2015 Trade Cases P 79 (N.D. Cal., 2015) (motion to dismiss cer- tain safety claims [based on Uber’s assertions that its safety is best in class, background checks are industry-leading and more rigorous than taxi standards, etc.; including certain advertising statements] denied); Checker Cab Phila., Inc. v. Uber Techs., Inc., Civil Action No. 14-7265, 2016 U. S. Dist. LEXIS 28447 (E.D. Pa. Mar. 7, 2016) (motion to dismiss granted in part, denied in part); (E.D. Pa. Mar. 3, 2015) (injunction to prevent Uber from operating allegedly illegal cab operation denied based on Pennsylvania law), aff’d, Checker Cab Phila., Inc. v. Uber Techs., Inc., 643 F. App’x 229 (3d Cir. Mar. 10, 2016) Delux Cab, LLC v. Uber Techs., Inc., 3:2016cv03057, 2017 U.S. Dist. LEXIS 57494 (S.D. Cal. Apr. 13, 2017) (follows reasoning in L.A. Taxi Coop, denies motion to dismiss on all claims but commercial speech-based Lanham Act claim); Greater Hous. Transp. Co. v. Uber Techs., Inc., 155 F. Supp. 3d 670 (S.D. Tex. 2015) (while several Uber statements re safety, including statements re background checks, were deemed nonactionable puffery, claim re Safe Rides Fee was deemed colorable); Manzo v. Uber Tech., Inc., No. 13 C 2407, 2014 U.S. Dist. LEXIS 95106 (N.D. Ill. July 14, 2014) (denying motion to dismiss claims under Illinois Consumer Fraud and Deceptive Business Practices Act and Illinois Uniform Deceptive Trade Practices Act that Uber misrepresents cost of its service, nature of the gratuity, its status as a transportation provider, and cost of livery service procured via Uber relative to competing services); Search v. Uber Techs., Inc., 128 F. Supp. 3d 222 (D. D.C. 2015) (denied motion to dismiss claim under D.C. Consumer Protection Procedures Act that Uber repeatedly represented to con- sumer public that its drivers were rigorously screened in order to ensure that they would not pose a danger to pas- sengers, but had failed to conduct such screenings). Cf., XYZ Two Way Radio Serv., Inc. v. Uber Techs., Inc., 214 F. Supp. 3d 179 (E.D.N.Y. Sept. 30, 2016) (granting motion to dismiss, holding to be puffery same statements found to be facially actionable in L.A. Taxi Coop.).

92 or misleading representations regarding the measures it takes to ensure customer safety in order to induce people to get into a stranger’s car . . . and (5) charging a fraudulent and misleading $1.00 ‘Safe Rides Fee’ to its UberX customers.”700 In addition to making more detailed claims about Uber’s practices than had been lodged against Lyft, the complaint described twenty- two instances of Uber drivers who passed Uber’s background checks “despite having criminal histories and driving records that are disqualifying under Uber’s own representations, PUC rules and regula- tions, and/or the rules and regulations applied by local taxi regulators.”701 In 2016, Uber entered into a stipulated judgment that permanently enjoined vari- ous activities complained of by the plaintiffs, includ- ing the use of fifteen specified terms to describe Uber’s criminal history and motor vehicle record background checks in California, and called for a civil penalty of up to $25 million.702 There is substantial charged by Uber go toward safety measures.696 Another 2017 class action complaint raised addi- tional issues. The complaint alleged that Uber had manipulated pricing in its “upfront” pricing system, under which Uber charged fares to customers based on routes that are often longer in distance and time than the actual routes displayed in the drivers’ appli- cation, thus charging the customers for the longer routes, while paying the drivers for the actual shorter routes. Claims alleged were breach of contract, unjust enrichment/restitution/fraud by conceal- ment, violation of the Lanham Act, unfair competi- tion in violation of California Business Professional Code §1 7200, and independent contractor misclas- sification and failure to pay wages. Uber’s motion to dismiss the second amended complaint was taken under submission as of November 30, 2017.697 2. State and Local Government Actions The district attorneys (DAs) of San Francisco and the County of Los Angeles have jointly sued first Lyft and then Uber concerning misrepresentations about the TNCs’ background checks. In 2014, the DAs filed a complaint against Lyft that included fairly general allegations about Lyft’s untrue or misleading misrepresentations concerning the scope and stringency of Lyft’s background check process.698 A Stipulated Judgment and Permanent Injunction was entered immediately, subjecting Lyft to manda- tory and prohibitory injunctive provisions regarding its representations about its criminal background checks of California drivers, including prohibiting the use of three specified terms and imposing a civil penalty of up to $500,000.699 In 2015, the DAs sued Uber in order to address, inter alia, “Uber’s flagrant and unlawful business practices, including its practice of: (1) making untrue 696 McKnight v. Uber Techs., Inc., Case No. l4-cv-05615- JST (N.D. Cal. Aug. 7, 2017) (order granting motion for preliminary approval of amended class action settlement), https://www.ridesharesettlement.com/Content/Documents/ Motion%20of%20Preliminary%20Approval.pdf. 697 Van v. Rasier, LLC, Case No.: 2:17-cv-02550 (C.D. Cal. Apr. 3, 2017). Motion to Dismiss Second Amended Com- plaints, Sept. 14, 2017, https://arstechnica.com/wp-content/ uploads/2017/09/uberresponsecheatingsoftwaresuitsep- tember14.pdf. On November 30, 2017, the court found that the motion was appropriate for decision without oral argu- ment, vacated a scheduled December 1 hearing, and took the motion under advisement. (IN CHAMBERS) ORDER by Judge Dolly M. Gee, https://www.pacermonitor.com/ public/case/21050657/Sophano_Van_v_Rasier,_LLC_et_al#. 698 People v. Lyft, Inc., Case No. CGC-14-543113, 2014 Cal. Super. LEXIS 11881 (2014) Complaint for Permanent Injunction, Civil Penalties, Restitution and Other Equita- ble Relief (Cal. Super. Ct. Dec. 9, 2014). 699 People v. Lyft, Inc., Case No. CGC-14-543113, Stipu- lated Judgment and Permanent Injunction (Cal. Super. Ct. Dec. 9, 2014). The specified terms were: best available; industry leading; and gold standard. The Stipulated Judg- ment conditioned the prohibition against using those terms: “unless Defendant utilizes the most comprehensive and technologically advanced background check process that is available to screen drivers of vehicles for hire any- where in California.” Id. at 4. The Stipulated Judgment called for $250,000 to be paid 30 days after the entry of the Stipulated Judgment, with $250,000 to be paid 450 days after the entry of the Stipulated Judgment. However, that second payment was stayable if reviews by the state determined that Lyft had complied with the Stipulated Judgment as specified in the order. Id. at 6–9. 700 People v. Uber Techs., Inc., Case No. CGC-14-543120, First Amended Complaint for Permanent Injunction, Civil Penalties, Restitution and Other Equitable Relief, ¶ 12, at 5 (Cal. Super. Ct. Aug. 18, 2015). The allegations of violations of the California Business & Professions Code—including misrepresentations re safety measures, violations of fare calculation regulations, unlawful operations at California airports, and corporate policy of regulatory disruption—are discussed in great detail in ¶¶ 13–116, at 5–42. 701 Id. at 27–36, ¶¶ 75–96. 702 People v. Uber Techs., Inc., Case No. CGC-14-543120, Stipulated Judgment and Permanent Injunction, (Cal. Super. Ct. Apr. 7, 2016). Prohibited terms are: best available, industry leading, leads the industry, gold standard, safest; best-in-class, safest ride on the road, strictest safety stan- dards possible, safest experience on the road, best in class safety and accountability, safest transportation option, back- ground checks that exceed any local or national standard, as far back as the law allows, the maximum allowable by California law, or safest possible platform. Id. at 5, ¶ 6.C. Unlike the Lyft Stipulated Judgment, there was no condition under which Uber is entitled to use these terms. The Stipu- lated Judgment called for $10 million to be paid 60 days after the entry of the Stipulated Judgment, with $15 million to be paid 850 days after the entry of the Stipulated Judgment. However, that second payment was stayable if reviews by the state determined that Uber had complied with the Stipu- lated Judgment as specified in the order. Id. at 8–12, ¶ 8.

93 states had reportedly opened investigations,707 and three additional government actions had actually been filed. In the first action, the City of Chicago and Cook County filed suit alleging that Uber engaged in decep- tive practices in failing to correct its data security practices as promised following a 2014 data breach and that it covered up the 2016 hack of its data system and subsequent payment of ransom to the hackers. The complaint alleged that Uber’s misrepre- sentation concerning its data security practices and concealment of the data breach violated the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), thereby violating Chicago Municipal Code Section 2-25-090; Uber’s failure to timely disclose the data breach violated Illinois’s Personal Information Protection Act, thereby violating Chicago Municipal Code Section 2-25-090. The prayer for relief included fining Uber $10,000 per violation involving a Chicago resident, per day each violation has existed/exists, and fining Uber $50,000 for violat- ing the ICFA, or if there is a finding of fraudulent intent, $50,000 for each violation of the ICFA.708 In the second action, the Washington AG filed what the AG’s office described as “a multi-million dollar consumer protection lawsuit” against Uber for “thousands of violations of the state’s data breach notification law.” The AG argued that following the statutory deadline for reporting the breach, each day Uber failed to report the breach for each affected individual Washington State driver (10,800+) was a separate violation of the statute.709 In the third action, the City Attorney of Los Ange- les filed suit on behalf of the state of California, alleg- ing that Uber’s failure to notify California drivers of the data breach violated the California Unfair Competition Law and sought civil penalties.710 [E-19] overlap between these now-prohibited terms and those cited by private plaintiffs in their negligent/ fraudulent misrepresentation suits against Uber. In 2014 and 2015, the New York State Attorney General (NYAG) had investigated Uber’s collection, maintenance, and disclosure of rider personal infor- mation under Uber’s “God view” program and a 2014 data breach of customer information that Uber disclosed in 2015. In 2016, the NYAG entered into a settlement with Uber that resolved both investiga- tions. Under the settlement, Uber was required to adopt specified data security practices and to pay a $20,000 penalty for failure to provide timely notice of the data breach.703 In November 2017, Uber disclosed that in 2016, the company had suffered a data breach that exposed the data of some 57 million users, as well as the names and driver’s license numbers of about 600,000 Uber drivers.704 The NYAG reportedly opened an investigation very shortly after the breach was announced. The failure to promptly announce the breach also appeared to violate California law.705 The UK Information Commission- er’s Office, as well as similar data protection author- ities in other countries, expressed concern. UK law provides for a maximum penalty of about $662,000 for failure to notify users and regulators of data breaches.706 As of December 2017, at least five other 703 Press Release, A.G. Schneiderman Announces Settle- ment with Uber to Enhance Rider Privacy, (Jan. 6, 2016) https://ag.ny.gov/press-release/ag-schneiderman- announces-settlement-uber-enhance-rider-privacy. 704 Jim Finkle, Uber CEO says company failed to disclose massive breach in 2016, reuterS, Nov. 21, 2017, https:// www.reuters.com/article/us-uber-cyberattack/uber-ceo- says-company-failed-to-disclose-massive-breach-in- 2016-idUSKBN1DL2UQ (accessed Nov. 21, 2017). 705 Taylor Hatmaker, New York attorney general launches investigation of Uber’s $100,000 hack cover-up, teCh- CrunCh, Nov. 21, 2017, https://techcrunch.com/2017/11/21/ ny-ag-schneiderman-uber-hack-cover-up/ (accessed Nov. 22, 2017). California law requires notice to California resi- dents of any data breach that affects the unencrypted per- sonal information of those residents, “in the most expedi- ent time possible and without unreasonable delay.” In addition, the statute requires providing to the state Attor- ney General of any covered breach that affects more than 500 California residents. Cal. CIV. Code § 1798.82, http:// leginfo.legislature.ca.gov/faces/codes_displaySection.xhtm l?lawCode=CIV&sectionNum=1798.82. See also, Cheryl Miller, Uber’s Concealed Cyber Breach Tests California’s Public Notification Law, the reCorder, Nov. 21, 2017, https://www.law.com/therecorder/sites/therecorder/2017/ 11/21/ubers-concealed-cyber-breach-tests-californias- public-notification-law/ (accessed Nov. 22, 2017). 706 Jim Finkle, Regulators to press Uber after it admits covering up data breach, reuterS, Nov. 21, 2017, https:// www.reuters.com/article/us-uber-cyberattack/regulators- to-press-uber-after-it-admits-covering-up-data-breach- idUSKBN1DL2UQ (accessed Nov. 22, 2017). 707 Tony Romm & Johana Bhuiyan, Uber is under investigation by multiple states over a 2016 data breach, reCode, Nov. 22, 2017, https://www.recode.net/2017/11/22/ 16690556/uber-data-hack-57-million-state-investigation (accessed Nov. 24, 2017). 708 City of Chicago v. Uber Techs., Inc., No. 2017-CH-15594 (Ill. Cir. Ct.) (complaint filed Nov. 27, 2017), https://www. scribd.com/document/365676414/Chicago-CCSAO-Uber- 11-27-17-Complaint. 709 Press Release, AG Ferguson Files Multi-Million Dol- lar Lawsuit Against Uber For Failing to Report Massive Data Breach (Nov. 28, 2017) http://www.atg.wa.gov/news/ news-releases/ag-ferguson-files-multi-million-dollar-law- suit-against-uber-failing-report (accessed Nov. 29, 2017). State of Washington v. Uber Technologies, Inc. (Wash. Super. Ct., Nov. 28, 2017). The November 28 complaint, http://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/ Another/News/Press_Releases/2017_11_28Complaint.pdf. 710 Press Release, City Attorney Mike Feuer Sues Uber (Dec. 4, 2017) https://www.lacityattorney.org/single-post/ 2017/12/04/City-Attorney-Mike-Feuer-Sues-Uber, com- plaint, http://freepdfhosting.com/0eb01873d8.pdf. [E-19]

94 the proposed settlement closed on September 15, 2017. However, the full commission had not yet voted on the settlement as of the time Uber disclosed its 2016 data breach.713 E. Tort Actions There has been a litany of complaints of negli- gence, assaults, and other misconduct by TNC driv- ers,714 but no cases were identified that adjudicated the claims. This section discusses two decisions denying motions to dismiss and the San Francisco case that provided an early impetus to the enact- ment of TNC insurance legislation, as well as the complaint in a late 2017 action seeking to require Uber to reform its background check process and to recover damages for assault. Although the sexual assault actions that are discussed further in this digest were brought against Uber, similar complaints have been filed against Lyft, albeit in apparent lower numbers. A 2017 complaint alleged negligent misrepresentation as to the safety of Lyft’s service as well as negligence and battery.715 1. Doe v. Uber Technologies, Inc.716 This case is one of the cases denominating the plaintiff as “Doe” and alleging that a TNC was responsible for sexual assault by one of its drivers.717 In this case, two different plaintiffs alleged sexual assault by their respective Uber drivers and sued Uber for (1) negligence and negligent hiring, super- vision, and retention; (2) fraud; (3) battery; (4) assault; (5) false imprisonment; and (6) intentional inflic- tion of emotional distress; claims three through six were made under a theory of respondeat superior. 3. Federal Trade Commission Actions In 2017, the Federal Trade Commission (FTC) addressed Uber’s claims regarding driver earnings and its privacy practices. First, an FTC action alleging FTC Act violations arising out of Uber’s false, misleading, or unsubstantiated claims regarding driver earnings and its Vehicle Solutions Program (i.e., program to lease vehicles to would-be drivers) was settled. The settle- ment agreement required Uber to pay $20 million to resolve the FTC charges and prohibited Uber from “misrepresenting drivers’ earnings and auto finance and lease terms,” and from “false, misleading, or unsub- stantiated representations about drivers’ income; programs offering or advertising vehicles or vehicle financing or leasing; and the terms and conditions of any vehicle financing or leasing.” In addition, the stipu- lated order required Uber to provide sufficient driver information to the FTC to enable the FTC to efficiently administer consumer redress, to submit compliance reports to the FTC, and to maintain records related to the compliance reports for 9 years. The district court retained jurisdiction for purposes of construction, modification, and enforcement of the order.711 The privacy issue appears to have been resolved without court intervention. After an investigation that also related to use of the “God view” tool and customer data breaches, the FTC alleged that Uber’s misrepresentations concerning its data security practices (both monitoring and security measures) regarding customer information constituted unfair or deceptive acts or practices in violation of § 5(a) of the FTC Act.712 The Commission voted to issue the administrative complaint and to accept the consent agreement in which Uber agreed to implement a comprehensive privacy program, including regular independent audits. The public comment period on 711 FTC v. Uber, Case 3:17-cv-00261-JST (N.D. Cal. Feb. 2, 2017) (Stipulated order for permanent injunction and monetary judgment); Federal Trade Commission v. Uber, Case 3:17-cv-00261 (N.D. Cal. Jan. 19, 2017) (complaint alleging violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a)); Press Release, Uber Agrees to Pay $20 Million to Settle FTC Charges That It Recruited Prospective Drivers with Exaggerated Earnings Claims (Jan. 17, 2017) https:// www.ftc.gov/news-events/press-releases/2017/01/uber- agrees-pay-20-million-settle-ftc-charges-it-recruited (accessed Feb. 23, 2017). 712 In the Matter of Uber Techs., Inc., (1523054) (com- plaint), https://www.ftc.gov/system/files/documents/cases/ 1523054_uber_technologies_complaint.pdf; Press Release, Uber Settles FTC Allegations that It Made Deceptive Pri- vacy and Data Security Claims (Aug. 15, 2017) https://www. ftc.gov/news-events/press-releases/2017/08/uber-settles-ftc- allegations-it-made-deceptive-privacy-data; Federal Trade Commission, Proposed consent agreement, File No. 152 3054, Uber Techs., Inc.; Analysis To Aid Public Comment, Aug. 21, 2017, https://www.gpo.gov/fdsys/pkg/FR-2017-08- 21/pdf/2017-17526.pdf. 713 Tony Romm & Johana Bhuiyan, Uber is under inves- tigation by multiple states over a 2016 data breach, reCode, Nov. 22, 2017, https://www.recode.net/2017/11/22/16690556/ uber-data-hack-57-million-state-investigation (accessed Nov. 24, 2017). 714 E.g., Emily L. Dyer, Need a Ride? Uber: The Trendy Choice That Could Turn Threatening, 17 neV. L. J. 239, 252–53, notes 91–99 (Fall 2016); Pfeffer-Gillett, supra note 21, at 235-37; Sam Levin, Uber attacked over pattern of ignoring police and victims before London ban, the GuardIan, Sept. 27, 2017, https://www.theguardian.com/ technology/2017/sep/27/uber-london-ban-sexual-assault- california-case-police (accessed Nov. 15, 2017). 715 E.g., Doe v. Lyft, Inc., Case No. CGC-17-556642 (Cal. Super. Ct. Jan. 25, 2017) (Complaint). The action appears to have been settled. A case management order was issued noting the case dismissal. (Cal. Super. Ct. Nov. 17, 2017) (Case management order). 716 184 F. Supp. 3d 774 (N.D. Cal. 2016). 717 E.g., Doe v. Uber Techs., Inc., Case No. 17-cv- 00950-WHO, 2017 U.S. Dist. LEXIS 83462 (N.D. Cal. May 31, 2017) (order granting motion to transfer); Doe v. Uber Techs., Inc., Civil Action No. 16-cv-03115-PAB-KMT, 2017 U.S. Dist. LEXIS 84317 (D. Colo. June 1, 2017).

95 that in the instant case, the policy rationales weighed in favor of letting the complaint to go forward on the scope of employment question: Assaults of this nature are exactly why customers would expect taxi companies to perform background checks of their drivers. Holding Uber liable could also forward the underlying policy goals of respondeat superior, including prevention of future injuries and assurance of compensa- tion to victims. . . . Arguably, though perhaps more tenu- ously, it is possible that allowing liability would more equitably spread the losses caused by the enterprise of shuttling customers in private cars.724 In addressing plaintiffs’ allegation that Uber is a common carrier for purposes of claims three through six—thus making the question of scope of employ- ment immaterial—the court discussed judicial construction of the definition of common carrier for purposes of tort claims: “any entity which holds itself out to the public generally and indifferently to transport goods or persons from place to place for profit.” The court dismissed as inapposite the cases cited by Uber in support of its argument that it is a transportation broker rather than a common carrier, as well as the cases Uber cited in support of the argument that common carriers are merely subject to a heightened duty of care and that scope of employment still controls liability. The court addressed the claims for negligent hiring, supervision, and retention, but it did not discuss the adequacy of Uber’s background checks. The court addressed the fraud claims, that Uber had made false statements about the safety of riding with Uber while knowing that Uber had not adequately screened its drivers and that Uber had fraudulently misrepresented its ability to track its drivers. Here the court found that the plaintiffs had adequately pleaded facts supporting these allega- tions. Moreover, because this pleading was adequate, the court denied the motion to dismiss the claim for punitive damages. 2. Doe v. Uber725 Two women brought this 2017 Doe action as a purported class action seeking injunctive and declaratory relief, as well as compensatory and punitive damages. Plaintiffs alleged Uber engaged in unfair and fraudulent business practices in Although the case was ultimately settled,718 the court’s reasoning in denying Uber’s motion to dismiss as to all claims but one—finding insufficient facts alleged as to negligent hiring of one of the two drivers—is instructive. First, the court agreed with two other California district courts that the facts pled were sufficient to support the allegation that the drivers were Uber employees. Second, the court held that it could not determine that as a matter of law, sexual assault by Uber drivers is always outside the scope of employment, although a finding of being within the scope would require a determination that the drivers are employees.719 Third, the court was “not persuaded” by Uber’s argument that it is merely a broker of transportation services and held that the plaintiffs had alleged sufficient facts to support their claim that Uber is a common carrier.720 The common carrier finding can be significant, although one that can be precluded under state TNC statutes.721 The court first addressed the existence of an employ- ment relationship, as Uber argued that the plaintiffs had not alleged sufficient facts to establish that there was one. The court reviewed the Borello factors and concluded the plaintiffs had alleged sufficient facts to state a claim that an employment relationship in fact existed. Although other factors—for example, the driv- ers being paid by the ride and providing their own cars and insurance—supported the assertion of indepen- dent contractor relationship, the court found that they were not necessarily dispositive and at any rate were not enough to convert the question into a matter of law. The court referred to similar conclusions drawn in O’Connor v. Uber and Cotter v. Lyft. The court then turned to Uber’s argument that it could not be vicariously liable because the sexual assaults were outside of the scope of the employee’s duty and therefore could not support employer liabil- ity, noting: “This is not necessarily so under California law.”722 The question in determining whether an act is within the scope of employment under California law is whether there is a causal nexus to the employee’s work and whether the act is not per se unforeseeable, keeping in mind the policy goals underlying respon- deat superior: “preventing future injuries, assuring compensation to victims, and spreading the losses caused by an enterprise equitably.”723 The court found 718 Doe v. Uber Techs., Inc., Case No. 15-cv-04670-SI (SI) (N.D. Cal. Nov. 3, 2016) (order of dismissal upon settlement). 719 Doe, 184 F. Supp. 3d at 785. 720 Id. at 787. 721 E.g., Florida law specifically provides that a “TNC or TNC driver is not a common carrier, contract carrier, or motor carrier and does not provide taxicab or for-hire vehicle service.” Fla. Stat. § 627.748(2). 722 Doe, 184 F. Supp. 3d at 783. 723 Id. at 784. 724 Id. at 785. 725 Doe v. Uber Techs., Inc., Case 3:17-cv-06571 (N.D. Cal. Nov. 14, 2017) (complaint), http://www.wigdorlaw. com/wp-content/uploads/2017/11/Uber-Filed-Complaint. pdf (accessed Nov. 15, 2017). See Johana Bhuiyan, Uber is facing a class action lawsuit from U.S. riders alleging assault, reCode, Nov. 14, 2017, https://www.recode.net/ 2017/11/14/16647706/uber-class-action-lawsuit-riders- sexual-assault-rape-violence-background-checks (accessed Nov. 15, 2017).

96 classifying workers as independent contractors is an integral part of the ride hailing company’s business model, and has saved Uber millions of dollars.”726 The complaint also asserted that the plaintiffs were not subject to the app’s arbitration provisions, as they were not required to read them to sign up for the app and at no time did they consent to the terms. The allegations concerning the terms of the app go to the allegedly unconscionable nature of the terms. 3. Liu v. Uber727 This was one of the first cases to illustrate the problem with the insurance gap that existed under Uber’s then-current policy to deny responsibility for comprehensive insurance coverage for its drivers. The wrongful death action arose out an incident in which a vehicle driven by an Uber driver—logged into the Uber app but not yet carrying a passen- ger—struck and killed a six-year-old pedestrian. The plaintiffs alleged that Uber and Rasier were vicariously liable for the driver’s conduct under, inter alia, theories of respondeat superior, agency, ostensible agency, and partnership, as well as alleg- ing that the Uber app itself was inherently danger- ous and that Uber was liable in strict product liability. The case was settled before any motions were ruled on.728 Notably, the complaint raised the inherent distracted driving nature of the Uber system, alleging that Uber knew or should have known that the use of the app as intended by Uber would violate California Vehicle Code 23123 (hands- free operation only of wireless devices) and Califor- nia Vehicle Code Section 26708 (location of GPS devices) and that the use of the app was the proxi- mate cause of the accident. 4. Search v. Uber Technologies, Inc.729 The plaintiff raised three separate tort claims: negligent hiring, training, and supervision; negli- gence under the theory of respondeat superior; and negligence under the theory of apparent agency. This opinion is noteworthy primarily because the court held that these torts could be alleged against Uber in the context of an assault by a driver. The court granted the motion to dismiss as to the first claim. Although a showing of an employment relationship was not required, the court held that the plaintiff failed to allege specific facts that would form the basis of an inference that (1) the employer violation of California law, violated the Consumer Legal Remedies Act, and was liable for the tortious acts of its drivers under respondeat superior. Injunc- tive relief requested included directing Uber to implement stricter and more thorough screening of potential drivers, subject existing drivers to immedi- ate review of conduct engaged in within the last 12 months, implement a policy to monitor driver conduct after they have been accepted to drive on the app, implement changes to provides a means to monitor rides during transport and centralize meth- ods to quickly notify Uber when a driver has gone off the app during a ride or substantially driven off route during an ongoing ride, and implement adequate insurance coverage for all stages of a ride and clearly inform the public about its insurance coverage polices. In addition to citing specific examples of Uber drivers’ alleged assaults on passengers as well as other criminal behavior, the complaint alleged facts concerning the inadequacy of Uber’s background check system, misleading marketing of the safety of Uber rides, misrepresentation concerning the adequacy of insurance coverage of driver behavior, detrimental reliance on the safety and insurance representations, and Uber’s claims that drivers are independent contractors. The complaint stated, “Despite the above facts, as a matter of policy, Uber claims that drivers are not at-will employees, but rather independent contractors. The value of 726 Complaint at 39. Fact alleged in the complaint included: • Despite being on notice of the problem, Uber main- tains a system of inadequate background checks and lack of follow-up monitoring of driver behavior, making the company responsible for ensuing assaults. • Uber drivers are under the same non-delegable duty to safely transport passengers as are taxi drivers and black-car drivers. • Uber is a common carrier, its drivers are agents of Uber in providing transportation, and the using of an app rather than a street hail to order a ride does not keep Uber from being a transportation company. • Uber’s online procedure does not include adequate identity verification of the driver applicants whose back- grounds are checked. • The 7-year background credit check is insufficient, and only covers U.S. information, so that some applicants do not even receive a 7-year background check. • Uber’s marketing of its service to young women who have been drinking has put them at risk. • Uber knowingly misleads consumers about insur- ance coverage for rides, notably respecting coverage when the driver turns off the app or if an Uber driver (illegally) accepts a street hail. • The arbitration provisions exclude the types of actions Uber is most likely to bring against others while requiring arbitration for the types of claims most likely to be brought against Uber. 727 No. CGC 14 536979 (Cal. App. Dep’t Sup. Ct. Jan. 27, 2014). 728 Dan Levine, Uber settles wrongful death lawsuit in San Francisco, reuterS, July 15, 2015, http://www.reuters. com/article/us-uber-tech-crash-settlement-idUSKCN 0PO2OW20150715 (accessed Mar. 17, 2017). 729 128 F. Supp. 3d 222 (D. D.C. 2015).

97 proprietary. The court determined that the PUC had correctly applied the test under its own regulation of balancing the alleged proprietary nature of the infor- mation at issue against the public interest in disclo- sure. The data in question provided total number of trips and lacked the detail—information on drivers, customers, or specific locations—required to allow customer targeting. Moreover, there was consider- able public interest in knowing how many trips Lyft had provided before it had authority to do so. The court reviewed Lyft’s explanation for why the poten- tial for harm to Lyft due to release of the data was substantial and termed it at best speculative and vague. The court was not persuaded by the argument that Lyft had been treated unfairly, because Uber data had been designated proprietary, given the differing circumstances under which the Uber desig- nation had occurred, notably without a PUC ruling. 2. Local Labor Ordinance Challenge In 2016, before any representational drives had been requested, the U.S. Chamber of Commerce sued to enjoin the Seattle ordinance that provided a mechanism for TNC drivers to engage in collective bargaining with TNCs within Seattle. The Chamber argued that the ordinance violated and was preempted by federal antitrust law, was preempted by the NLRA, and violated the Washington Consumer Protection Act and Washington Public Records Act.731 The district court granted the city’s motion to dismiss due to lack of standing as to either the individual members or the Chamber itself. On March 9, 2017, the Chamber filed a motion for a temporary restraining order and/or preliminary injunction and a new complaint, alleging Sherman Act preemption and violation, and NLRA preemp- tion (Garmon732 and Machinists733). On April 4, 2017, the district court granted preliminary injunctive relief,734 finding that the Chamber had raised seri- ous antitrust questions.735 However, after extensive did not conduct a reasonable background investiga- tion and (2) such an investigation would have uncov- ered a reason not to hire the offending employee/ independent contractor. The respondeat superior claim did require a pleading sufficient to demonstrate an employment relationship. As discussed supra Section A, the court found the pleading sufficient in that regard. The court then addressed Uber’s argument that the stabbing occurred outside the scope of the driver’s employment, because a violent attack could not be one of the driver’s job duties. However, under D.C. case law, an assault growing out of a job-related controversy may be considered within the scope of employment, and whether that is so is a jury ques- tion. Thus the motion to dismiss the respondeat superior claim was denied. The apparent agency claim rested on the allega- tion that Uber represented to its customers that the drivers were its agents, screened and managed by Uber; it did not require a pleading of the existence of an employment relationship. This representation would provide the “apparent authority” basis for imputing to Uber liability for the driver’s tortious acts, since even if the driver were an independent contractor, Uber would have put the driver in a posi- tion to mislead third parties into believing that the driver had authority he did not in fact possess. Uber relied upon its user agreement as rebuttal, which the court refused to consider in the context of a motion to dismiss. F. Miscellaneous Several issues not falling under the preceding categories may be of interest because of their poten- tial relationship to TNC contract negotiations or risk profiles. Examples of actions that have raised these issues are described further in this digest. 1. Assertion of TNC Data Confidentiality The research for this digest identified one instance of a TNC suing to challenge the categorization of the proprietary nature of TNC trip data.730 This action is noteworthy because classification of TNC data as proprietary can be a significant issue in TNC contract negotiations. Prior to the passage of Pennsylvania’s TNC stat- ute, in the course of administrative proceedings concerning Lyft’s authorization to operate in Allegh- eny County, Lyft asserted that its aggregated trip data was proprietary and sought a protective order under 52 Pa. Code § 5.[365], which order was denied by the ALJs. On review of that order, the Pennsylva- nia PUC concluded that the data was not in fact 730 Lyft, Inc. v. Pa. Pub. Util. Comm’n, 145 A.3d 1235 (Pa. Commw. Ct. 2016). 731 Chamber of Commerce v. City of Seattle, No. C16- 0322RSL, 2016 U.S. Dist. LEXIS 122723 (W.D. Wash. Aug. 9, 2016) (order granting defendants’ motion to dismiss). See Richard Keeton, An Uber Dilemma: The Conflict Between the Seattle Rideshare Ordinance, the NLRA, and For-Hire Driver Worker Classification, 52 GonZ. l. reV. 207 (2017). 732 San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S. Ct. 773, 3 L. Ed. 2d 775 (1959). 733 Machinists v. Wisc. Emp’t Relations Comm’n, 427 U.S. 132, 140, 96 S. Ct. 2548, 2553, 49 L. Ed. 2d 396, 403 (1976). 734 Chamber of Commerce v. City of Seattle, 274 F. Supp. 3d 1140 (W.D. Wash. Apr. 4, 2017) (order granting motion for preliminary injunctive relief). A group of drivers also filed suit to challenge the ordinance. Clark v. Seattle, Case No. 2:17-cv-00382-RAJ (W.D. Wash. Mar. 3, 2017). 735 Id. at 4–6. 736 Id. at 6–15.

98 3. San Francisco Government Enforcement Action On June 22, 2017, a California court ordered Uber to comply with a San Francisco administrative subpoena to disclose driver contact information for the purposes of ensuring compliance with the San Francisco business and tax code.741 Also in June 2017, the San Francisco City Attorney’s Office (City Attorney) began investigating whether Uber and Lyft constitute a public nuisance due to public safety, accessibility, discrimination, compensation and other issues arising from the companies’ explosive growth.742 On June 5, 2017, the City Attorney issued administrative subpoenas in support of this investi- gation to Uber, Rasier, and Lyft, and made a public records request to the CPUC. Faced with TNC refusal to share data, the San Francisco County Transportation Authority collaborated with North- eastern University to develop a profile of estimated TNC usage within San Francisco.743 Uber served general objections to the subpoenas on June 20, 2017. Lyft provided what the City Attorney categorized as “a small number of public documents” and insisted the City Attorney sign a confidentiality agreement before Lyft would produce additional docu- ments, such as its annual reports, to the CPUC. Lyft also insisted that the City Attorney not allow SFMTA to access to certain information, including the CPUC reports. The City Attorney, on behalf of the City and County of San Francisco, sought judicial enforcement of the subpoenas. The enforcement petitions stated that the subpoenaed information was essential to determining whether the companies are complying with state law concerning accessibility for persons with disabilities and the state public nuisance law, as well as the city’s independent contractor minimum compensation ordinance. The subpoenas sought eight items of information, including the annual reports filed by the TNCs with the CPUC from 2013 to 2017 and the raw data supporting six of the specific analysis of the NLRA claims,736 the court rejected both the Chamber and individual plaintiff ’s argu- ments as to Garmon and concluded that the Cham- ber had not shown it was likely to succeed on the merits of its Machinists claim. In August 2017, the district court addressed the motion to dismiss the March 2017 complaint.737 The court reviewed the defendants’ standing, ripeness, and state action immunity arguments for dismiss- ing the federal antitrust claim. Although the district court found that the plaintiffs had standing to pursue the claim and that the controversy was ripe, the court also found that state action immunity against federal antitrust enforcement was warranted. The court rejected plaintiffs’ argu- ment that state law authorization of immunity should be limited to the type of regulations specifi- cally authorized in the statute and the way that such authorization has been used in the past. However, the Ninth Circuit granted the plaintiffs’ motion for an emergency stay of the ordinance pend- ing appeal.738 In November 2017, the FTC filed an amicus brief that argued that the ordinance should be overturned because the district court’s “errone- ous state action analysis” could “open the antitrust exemption door for nearly any type of regulation.”739 On February 5, 2018, a three-judge panel heard arguments on both the U.S. Chamber’s antitrust action and the drivers’ NLRA action. Regardless of the outcome of the Ninth Circuit decision, an appeal to the Supreme Court is anticipated.740 [E-20] 736 Id. at 6–15. 737 Chamber of Commerce v. City of Seattle, No. C16- 0322RSL (W.D. Wash. Aug. 1, 2017) (order granting defen- dants’ motion to dismiss). 738 Chamber of Commerce v. Seattle, Case No. 17-35640 (9th Cir. Aug. 29, 2017) (order granting TRO pending rul- ing on emergency motion for stay pending appeal); Cham- ber of Commerce v. Seattle, No. 17-35640 (9th Cir. Sept. 8, 2017), https://sccinsight.com/wp-content/uploads/2017/09/ order-9-8-17.pdf. 739 Chamber of Commerce v. Seattle, Case No. 17-35640 (9th Cir. Nov. 3, 2017) (brief for the United States and the Federal Trade Commission as amici curiae in support of appellant and in favor of reversal), https://www.ftc.gov/ system/files/documents/amicus_briefs/chamber-com- merce-united-states-america-rasier-llc-v-city-seattle- et-al/seattle_17-35640_-_ftcdoj_amicus_11317.pdf?utm_ source=govdelivery. 740 Uber union ordinance goes before the Ninth Circuit, and has a mixed day, SCC InSIGht, Feb. 5, 2018, https:// sccinsight.com/2018/02/05/uber-union-ordinance-goes- ninth-circuit-mixed-day/ (accessed Feb. 7, 2018); Richard Meneghello, Federal Appeals Court Hears Next Round In Seattle’s Gig Worker Union Organizing Fight, GIG emPloyer bloG, Feb. 5, 2018, https://www.fisherphillips. com/gig-employer/federal-appeals-court-hears-next- round-in#page=1 (accessed Feb. 7, 2018). [E-20] 741 City and County of S.F. v. Uber Techns., Inc., Case No. CPF-17-515663, 2017 Cal. Super. LEXIS 474 (Cal. Super. Ct. June 22, 2017) (Order requiring Uber Technolo- gies, Inc. to disclose driver contact information to the San Francisco tax collector). 742 Press Release, Herrera seeks court orders requiring Uber and Lyft to follow the law (July 21, 2017) https://www. sfcityattorney.org/2017/07/21/herrera-seeks-court-orders- requiring-uber-lyft-follow-law/ (accessed Sept. 3, 2017). 743 Press Release, SFCTA Releases “TNCs Today” Report, Highlighting Uber, Lyft Activity in San Francisco (June 13, 2017) http://www.sfcta.org/sites/default/files/ content/Executive/Press/2017/SFCTA%20Press_release_ SFCTA%20releases%20TNCs%20Today%20report%20 06.13.17.pdf; TNCs Today: A Profile of San Francisco Transportation Network Company Activity, San Francisco County Transportation Authority, June 2017, https://www. sfcta.org/sites/default/files/content/Planning/TNCs/TNCs_ Today_112917.pdf.

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TRB's Transit Cooperative Research Program (TCRP) Legal Research Digest 53: Legal Considerations in Relationships Between Transit Agencies and Ridesourcing Service Providers explores the efforts made by public transit agencies to provide on-demand services to the public.

It also provides transit agencies with legal guidance for considering whether to enter into relationships with ridesourcing service providers (RSPs).

The report includes a description of ridesourcing services in the United States, state and municipal legislative and regulatory schemes, procurement and procurement processes, contractual and partnership provisions in agreements between RSPs and a public transit agency, issues of compliance with federal legislation and civil rights requirements and those under the Americans with Disabilities Act, legal claims and litigation, and risk management issues stemming from relationships between RSPs and transit agencies.

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