The US Court of Appeals for the Ninth Circuit on Tuesday agreed to hear an appeal by Uber of a federal district court order that certified a class of nearly 160,000 drivers in California who challenge their status as independent contractors. Uber’s attorneys argue that the drivers signed away their right to participate in class-action lawsuits due to a binding arbitration clause in their agreement with Uber. However, District Judge Edward Chen certified the class action last September finding that the arbitration agreements were unenforceable. Uber has consistently maintained that the arbitration clause in the driver contracts is the only avenue for any remedy or resolution that the drivers may seek. A jury trial was initially scheduled for June 20, but if Uber succeeds in its appeal, the entire structure of the lawsuit may change, involving far fewer plaintiffs than originally planned.

With the rapid growth of companies like Lyft and Uber, ride-sharing services have been among the most controversial business models in recent history. App-based ride-sharing services have been both praised for their successful implementation and criticized for their uncertain position in transportation regulation. In several states, ride-sharing companies have met significant legal opposition, frequently led by competitors such as the taxi industry. Other unresolved questions surrounding this new business model continue to prompt debate among lawmakers. Although some cities and states, such as California, have developed new laws mandating certain insurance for ride-sharing drivers, others have resisted. Officials in Buffalo, for example, find the lack of insurance regulation in this industry too unsafe, so prohibit ride-sharing companies like Lyft and Uber from operating inside the city. In fact, the Attorney General of New York, Eric Schneiderman, sued Lyft for operating in violation of local regulations in Rochester and Buffalo, resulting in a $300,000 settlement. Further controversy surrounds the potential threat to taxi-drivers and companies, a threat that has also sparked litigation.