If contract drivers win bid for reimbursement, it could cost Uber millions

SAN FRANCISCO — Fifty-seven and a half cents for every mile logged.

That’s the latest demand from Uber Technologies Inc. drivers in California suing to be treated like employees.

Whether the drivers can pursue pay for mileage on their own vehicles going back to 2009 is up for debate at a court hearing set for Tuesday, as the dispute over drivers’ status moves toward a trial in June. If drivers who have gotten nothing so far from the company are allowed to seek reimbursement, Uber’s potential exposure would increase sharply, possibly by hundreds of millions of dollars, according to legal experts.

The judge will also consider at Tuesday’s hearing whether to add more drivers to the class-action, which threatens to upend the ride-hailing company’s business model and cut into its $50 billion valuation.

The drivers already have won permission from U.S. District Judge Edward Chen in San Francisco to press as a group for tips they claim they were denied as independent contractors. At the same time, Chen limited the size of the group to what Uber says amounts to less than a 10th of its 160,000 drivers in California. The company, founded six years ago, says most of its drivers joined in the last two years, when the Internal Revenue Service’s mileage reimbursement rate grew from 56 cents to 57.5 cents.

Mileage reimbursement would be a tremendous “ongoing liability” for Uber if a jury finds the company has misclassified its drivers as contractors, said Beth A. Ross, an employment lawyer who settled a similar case against FedEx Corp. for $227 million on behalf of about 2,000 drivers.

“It really calls into question the economic feasibility of Uber’s business model,” she said. “Which isn’t to say Uber couldn’t operate the very same service that it provides now, in a lawful manner, by treating these drivers as employees and paying them as employees, and still make money.”

But as a company that bills itself as a technology platform rather than a transportation provider, Uber appears to be resisting an overhaul of its administrative infrastructure to conform with the employee model, she said.

Jessica Santillo, a spokeswoman for Uber, declined to comment, saying the company’s position is explained in court filings.

A lawyer for the drivers is asking Chen to add tens of thousands of drivers hired since 2014 who were excluded because their contracts with Uber required them to resolve disputes through arbitration instead of in court.