(Bloomberg) -- Uber Technologies Inc. will have to defend a group lawsuit brought by drivers seeking the pay and benefits of employees.
The judge’s ruling may slow Uber’s growth and cut into its $50 billion valuation. It could affect drivers around the country, even though the San Francisco case is limited to as many as 160,000 drivers in California.
Changing drivers’ status from contractors would entitle them to unemployment and workers’ compensation as well as the right to unionize. Tuesday’s ruling by U.S. District Judge Edward Chen means Uber’s California drivers can press as a group for reimbursement for tips. Other courts in the U.S. will likely look to Chen’s reasoning in evaluating other such challenges.
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