Reduced tax obligations by classifying drivers as contractors, not employees

Uber classified drivers as contractors, not employees.¬† As a result, the company avoided withholding income tax from driver earnings, and avoided paying the employer’s share of payroll taxes.

The correctness of this classification is disputed via ongoing litigation in numerous jurisdictions. On July 12, 2017, Uber drivers in North Carolina won preliminary class-action status in a case brought under the Fair Labor Standards Act.