Uber and Lyft are committing wage theft by misclassifying drivers as independent contractors, California’s labor commissioner alleges in separate lawsuits against the companies. The classification of drivers as freelance workers has deprived them of “a host of legal protections in violation of California labor law,” the lawsuits say.
“The Uber and Lyft business model rests on the misclassification of drivers as independent contractors,” said California Labor Commissioner Lilia García-Brower in a statement. “This leaves workers without protections such as paid sick leave and reimbursement of drivers’ expenses, as well as overtime and minimum wages.”
The pair of lawsuits are the latest legal challenges against Uber and Lyft in California, the state where both companies were founded and prospered — and now find themselves increasingly at peril.
In May, California Attorney General Xavier Becerra, along with city attorneys of Los Angeles, San Francisco, and San Diego, sued the companies, arguing that their drivers were misclassified as independent contractors when they should be employees under the state’s AB5 law that went into effect on January 1st. Becerra recently filed a motion for a preliminary injunction that could compel the ride-hailing companies to reclassify drivers as employees immediately. California’s state court is expected to rule on the attorney general’s preliminary injunction on Thursday.
These latest lawsuits are of a similar vein. The state’s labor commissioner has received nearly 5,000 claims from drivers for lost wages. But García-Brower is seeking to recover wages owed to all of the state’s Uber and Lyft drivers, as well as expenses for a wide range of statutory violations and damages.
If drivers were classified as employees, Uber and Lyft would be responsible for paying them minimum wage, overtime compensation, paid rest periods, and reimbursements for the cost of driving for the companies, including personal vehicle mileage. But as independent contractors, drivers receive none of these benefits.
In a statement, Uber claimed the lawsuit is ill-timed due to the coronavirus pandemic. “The vast majority of California drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under state law,” an Uber spokesperson said in a statement. “When 3 million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry.” A Lyft spokesperson did not immediately respond to a request for comment.
This flurry of lawsuits and court rulings comes ahead of the November election, when California voters will vote on an Uber-and-Lyft-backed ballot measure that would override AB5 by classifying ride-hail drivers and other gig economy workers as independent contractors.