Uber is facing an old problem but in a new place.
The ride-hailing company has faced lawsuits from drivers who argue they are employees rather than independent contractors in several cities where it operates and it can now add one more city to the list: Lagos.
Two drivers representing other drivers on the platform have started a class action suit in Nigeria’s economic hub arguing that they should receive employee benefits from Uber. The suit poses that “by virtue of the nature of the defendant’s control over the claimants and members of their class, they are not meant to be classified as independent contractors.” The suit also wants Uber to be mandated to provide its drivers with health insurance and pension benefits. Uber launched in Lagos in August 2014.
Uber’s classification of drivers as independent contractors is fundamental to how it operates as it allows the company avoid paying any employee benefits, a guaranteed minimum wage or be liable for any extra expenses incurred by the drivers. Employing all its drivers as staff will prove expensive even for a company possibly valued at over $100 billion.
Uber’s company’s relationship with its drivers has long been subject to lots of scrutiny—and lawsuits—with mixed results. In one of the most prominent cases, back in April 2016, Uber reached a prominent $100 million settlement in a class-action suit which included nearly 400,000 drivers in Massachusetts and California which let it to continue classifying them as independent contractors. (The settlement was later rejected as being unfair by a US district judge). Elsewhere, in June, New York’s state labor department ruled that three former Uber drivers were eligible to receive unemployment benefits.
Across Africa where it has now operated for four years, Uber’s challenges have often come more in form of protests than lawsuits. Local taxi drivers have claimed that ride-hailing company and its driver have an unfair advantage as they don’t have to pay taxi union levies and fees. In South Africa, the face-off has spurned violent protests and, to better protect drivers, Uber launched in-vehicle SOS buttons. In Nigeria, the company has also faced strike actions from its drivers who claim fares are too low.