Uber’s shares tumble after court decisions favorable to

Unfavorable court decisions for Uber in Canada and the United States dropped the company’s shares to $39.95 on the New York Stock Exchange on the 20th. In one month, the devaluation was 15.8%.

This is the first week since November 2020 that the shares of the American multinational start trading below US$40.

The most important decisions

On August 12, the Ontario Superior Court of Justice, Canada, ruled a class action against the company, in which drivers are seeking US$400 million in collective damages.

Drivers accuse Uber of fraud in the job classification, considering them as self-employed rather than employees.

“This decision does not address the merits of the case, but only the formal and procedural requirements for the class action to be judged. However, it is an important decision, since overcoming these requirements [pré-julgamento] it is not easy in Canadian law”, emphasizes lawyer José Eduardo Resende Chaves Júnior, retired judge of the Regional Labor Court of the 3rd Region (TRT3).

Read too: Uber courts see “manipulation of jurisprudence” and begin to rule against Uber

In the cradle of Uber

Last Friday (20), a Superior Court judge in Alameda County, California, ruled unconstitutional section 745 of the state’s Labor Code, amended in favor of Uber after a referendum held in November 2020.

At the time, 58.6% of voters voted in favor of the so-called Proposal [ou Proposição] 22, which considers drivers to be self-employed, granting them some additional benefits.

“The referendum removed the qualification as an employee of the drivers and deliverers of the applications in California. This framework had been made by California law AB-5, after a decision by the Supreme Court of California in this regard”, explains Chaves Júnior.

“On the 20th, the lower court considered such a referendum unconstitutional, because in practice it makes it impossible for the Californian Legislative Power to grant new rights to platform workers, as it requires an incredible 7/8 quorum to change it.”

The action was promoted by the Service Employees International Union (SEIU).

“The Supreme Court of California had recently rejected a lawsuit on the same terms, but it allowed such a debate to be held in the first degree, which happened now,” recalls the lawyer.

The company said it will appeal this decision.

Historic

The dispute over Proposition 22 began in California with a lawsuit by a worker from Dynamex, a parcel delivery company, in 2018. Drivers received uniforms and took orders from the company, but were formally treated as independent contractors.

That year, the case reached the Supreme Court of California, which recognized the employment relationship and won the worker.

After this decision, State Representative Lorena Gonzalez took the case to the Legislative Assembly, obtaining successive approvals, until the sanction of Governor Gavin Newsom – consolidating the favorable understanding of application workers in California through the AB-5 law, in 2019.

AB-5 was supposed to go into effect on January 1, 2020. However, Uber and other companies in the sector reacted and managed to submit the decision to a state plebiscite, held in parallel with the presidential elections.

Companies like Uber, Lyft, DoorDash and Instacart spent about $200 million – more than R$1.1 billion – campaigning to pass the measure, which last week was reversed in Alameda County Superior Court.

eyeing

Uber was founded precisely in California in 2009, and drivers expect decisions like this to have global impacts.

Former driver and author of the book My battle against Uber, Wagner Oliveira was the first to sue the company in Brazil and monitors court decisions abroad on a daily basis.

“Uber wanted to change the California law to fit its business model, saying that the driver is an independent contractor and that it is a technology company,” says Oliveira.

“This is all a lie. It is a private passenger transport company, which does not want to assume labor costs because this is part of its project of dump, to break the public transport system.”

Oliveira says that there was a misleading campaign during the 2020 referendum, leading the population to error.

“Many people voted in favor of Proposition 22, believing it was helping drivers, when in fact it was the opposite”, recalls the former driver, who maintains a YouTube channel with videos about the damage caused by Uber and other multinationals in the sector.

“This decision of the magistrate [da Califórnia no dia 20] will bring serious annoyance to the company, and Uber’s shares are falling even further.”

Judge José Eduardo Resende Chaves Júnior claims that these decisions do not produce objective reflections on the processes filed by drivers in Brazil – Uber’s largest market outside the United States.

“The concepts of employees are similar [entre os países], with some differences, but they do not have any binding force in Brazil”, he emphasizes.

“It only creates a paradox: if in a more liberal country in the economy, such as the United States, the Judiciary has given numerous decisions in favor of the existence of a subordinate employment contract, it is difficult to understand how the employment relationship here not be considered, as we have in Brazil the principle of presumption of laborality of personal work.”

The Superior Labor Court (TST) decided, in four different judgments, that there is no employment relationship between Uber and the drivers.

Other side

O Brazil in fact presented questions to Uber about the topic recently. Check the answer, in full:

“The partner drivers are not employees or provide services to Uber, they are independent professionals who hire the travel intermediation technology offered by the company through the application. Thus, there is no subordination in the relationship, as Uber does not exercise control over drivers, who choose when and how to use the company’s technology.

Drivers freely choose the days and times to use the app, whether or not to accept trips and, even after that, there is still the possibility of cancellation. There are no goals to be met, there is no minimum number of trips required, there is no boss to supervise the service, there is no obligation of exclusivity in hiring the company, and there is no control or determination of compliance with the minimum working hours.

​In recent years, Brazilian courts have been building solid jurisprudence confirming the fact that there is no employment relationship between Uber and partner drivers, pointing out the lack of onerousness, habituality, personality and subordination, requirements that would constitute an employment relationship. Across the country, there are already more than 900 decisions by Regional Courts and Labor Courts in this regard, in addition to judgments in the STJ (Superior Court of Justice) and four decisions in the TST (Superior Labor Court).”

Edition: Vinícius Segalla

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