Part of the lure of Uber is that people summon rides and pay using smartphone applications, with transactions going through Uber and no need for cash on hand. Uber allows for tip-free rides.
"While we are not surprised by this court's ruling, we are pleased that it has decided to certify only a tiny fraction of the class that the plaintiffs were seeking," an Uber spokesperson said.
"That said, we'll most likely appeal the decision as partners use Uber on their own terms, and there really is no typical driver - the key question at issue."
Cracks have begun to appear in the model developed by Uber and other peer-to-peer services.
Lawsuits in several jurisdictions argue that on-demand workers are not independent contractors, but rather employees entitled to unemployment insurance, workers compensation and other benefits.
Politicians are taking notice, with democratic presidential front-runner Hillary Clinton recently saying she would "crack down on bosses who exploit employees by misclassifying them as contractors".
Yet some are warning that without a flexible workforce of independent contractors, the sharing economy could be stopped in its tracks.
"We would not see the dynamic, innovative environment we have today," said Christopher Koopman, a research fellow at George Mason University's Mercatus Center.
Uber has been maintaining an aggressive international expansion plan - it operates in some 250 cities around the world - despite fierce opposition in some countries from regulators and established taxi industry players.
The company decided to suspend its low-cost service in France after a nationwide taxi strike in protest against Uber turned violent.
- AAP
