The Fair Work Ombudsman has launched an investigation into Uber and whether its contracts with tens of thousands of Australian drivers are in breach of federal workplace laws.

The employment watchdog undertook to probe the US-based company's contractual relationship with its large workforce of "driver-partners" earlier this month, after a request by a group of disgruntled drivers who argue they have been "misclassified" by Uber as self-employed.

The Ombudsman is now preparing to interview drivers who use Uber's wildly popular, low-cost UberX platform, which has upended the taxi industry's established business model in Melbourne and around the world.

A spokesman for the Fair Work Ombudsman said it had "commenced an investigation into Uber, with the purpose of determining whether the engagement of Uber drivers is compliant with Commonwealth workplace laws".