The top attorneys for the state’s largest cities joined California Attorney General Xavier Becerra Tuesday to announce a lawsuit against Uber and Lyft, claiming the ride-hailing companies misclassified their drivers as independent contractors instead of employees.
Los Angeles City Attorney Mike Feuer joined Becerra and the city attorneys of San Diego and San Francisco in the lawsuit.
“Enough is enough. California law makes it clear that Uber and Lyft drivers are employees,” Feuer said. “We allege Uber and Lyft defy this mandate, exploit their drivers and unlawfully shift the costs of their responsibilities as employers to California’s taxpayers.”
“As law enforcement leaders across the state, we’re going to aggressively protect these hard-working drivers and fight to uphold California’s worker classification laws,” Feuer said.
In the lawsuit filed in the Superior Court of San Francisco, the coalition of attorneys seek restitution for workers, a permanent halt to the “unlawful misclassification of drivers” and civil penalties, which they said could reach hundreds of millions of dollars.
The attorneys said classifying drivers as independent contractors deprives them of workplace protections such as the right to minimum wage and overtime pay, as well as access to paid sick leave, disability insurance and unemployment insurance.
The attorneys allege that since the passage of Assembly Bill 5 and under California’s Unfair Competition Law, Uber and Lyft have not classified employees as full-time.
“We are looking forward to working with the attorney general and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible,” Lyft said in a statement, “especially during this time when the creation of good jobs with access to affordable health care and other benefits is more important than ever.”
Uber also responded to the lawsuit and said the company is prepared to contest it in court.
“At a time when California’s economy is in crisis with 4 million people out of work, we need to make it easier, not harder, for people to quickly start earning,” Uber said in a statement. “We will contest this action in court, while at the same time pushing to raise the standard of independent work for drivers in California, including with guaranteed minimum earnings and new benefits”
According to Becerra, independent contractor classification also allows companies to avoid obligations such as paying payroll taxes.
The attorney general said the companies ignore the fact that California law allows for drivers to choose when and how much to work and still be classified as employees.
Nothing prevents the companies from providing flexibility to their drivers and classifying them as employees, he said.
Becerra said unemployment claims have been “skyrocketing” during the COVID-19 pandemic, and the vulnerability of Uber’s and Lyft’s drivers to the virus is evident.
“Sometimes it takes a pandemic to shake us into realizing what that really means and who suffers the consequences,” Becerra said. “Uber and Lyft drivers who contract the coronavirus or lose their job quickly realize what they’re missing. But it’s not just these workers who lose. American taxpayers end up having to help carry the load that Uber and Lyft don’t want to accept.”
In the lawsuit, the attorney general and the city attorneys are seeking up to $2,500 for each violation of the California Unfair Competition Law and up to another $2,500 for violations perpetrated against senior citizens or individuals with disabilities.
“All Californians are harmed when companies like Uber and Lyft cheat their employees out of health care, unemployment benefits, and basic protections required by law,” San Diego City Attorney Mara Elliott said. “Uber and Lyft are billion-dollar companies that refuse to follow the rules, expecting taxpayers to pick up the slack when their employees get sick, need a hospital or lose their jobs. It’s time for Uber and Lyft to pay their own bills.”
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