San Francisco, Sep 12: The Uber technologies Inc. has come under massive fire in San Francisco after a car delivery service alleged that it uses its illegal labour savings to price rides below their true cost. Uber allegedly uses the labour savings to price rides below their true cost, allowing it to take business and market share from competitors that compensate drivers as employees.
A case has been filed against Uber that it may be saving more than $500 million a year by misclassifying its California drivers as independent contractors. Uber avoids paying an average of $9.07 an hour in expenses and benefits that it would incur if drivers were properly treated as employees, according to the complaint filed in federal court in San Francisco.
Also Read | 4th incident of cabbie rage in Bengaluru
The complaint cites an ruling by the California Supreme Court in April that set a tougher threshold for companies to classify workers as independent contractors.
Uber is yet to respond to the allegations. The law suit is filed in U.S. District Court, Northern District of California (San Francisco).