San Diego City Attorney Mara W. Elliott joined California Attorney General Xavier Becerra and the City Attorneys of Los Angeles and San Francisco Tuesday in filing a lawsuit against Uber and Lyft, alleging the rideshare companies misclassified their drivers as independent contractors.
The lawsuit filed in San Francisco County — where the companies are headquartered — states that Uber and Lyft’s alleged misclassification prevents workers from “ensuring they receive the compensation and benefits they have earned through the dignity of their labor.”
The suit alleges the companies are violating recently enacted Assembly Bill 5, which seeks to ensure “gig workers” misclassified as independent contractors are afforded certain labor protections, such as the right to minimum wage, sick leave, unemployment insurance and workers compensation benefits.
The plaintiffs are seeking restitution for workers, a permanent halt to alleged unlawful misclassification and civil penalties “that could reach hundreds of millions of dollars.”
“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 said the company is prepared to contest the claim 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”
“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,” 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.”
Elliott’s office also previously filed suit against grocery delivery company Instacart, with similar allegations of misclassification.
A San Diego judge ruled in favor of the city, but Instacart appealed the decision, resulting in a stay on the judge’s order.
Assemblywoman Lorena Gonzalez, D-San Diego, author of AB 5, said, “The state Supreme Court, the Legislature, and the Governor have all acted to require these billion-dollar companies to abide by the same basic laws that other employers — big and small — follow in California. No corporation, no matter how powerful or rich they are, should be able to exempt themselves from providing basic workplace protections like minimum wage, social security and unemployment insurance. It makes sense that our state’s highest law enforcement officials are now stepping in.”
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