Have Uber and Lyft been guilty of misclassifying its drivers as independent contractors when they’re really employees? California thinks so. The state’s Attorney General, Xavier Bacerra, and the city attorneys from three major metropolitan areas within the state have filed a joint lawsuit against Uber and Lyft over the issue. This brings to a head a dispute that’s been brewing for quite a while.
Uber and Lyft have long maintained that their business model makes drivers independent contractors — and the two companies have defied any attempts to change that system. As independent workers, the drivers are not provided with a minimum hourly wage, any kind of sick leave, disability benefits, vacation time or unemployment benefits in the case of injuries. According to the complaint, however, the classification is unfair. If so, workers are being denied their fair due — and the companies are operating illegally.
Uber and Lyft have already been battling against Assembly Bill (AB) 5, the California law that has changed the way that tech companies are allowed to use the independent contractor label on some of their employees. The companies say that the law — and this lawsuit — would make it much harder for them to successfully operate and could put them out of business in the state.
Classifying an employee as an independent contractor is one of the biggest ways that employers try to cheat the system (and employees). A true independent contractor has extensive freedom to operate without a lot of direction or control by the person hiring them. They also have far less protection than regular employees — and fewer guarantees or stability.
It will be interesting to see how this lawsuit plays out. While “gig” work has been useful to a lot of people, many gig workers eventually feel like they’re being mistreated — and they and politicians are fighting back.
If you believe that your employer has misclassified you as an independent contractor and deprived you of benefits and rights you are due, find out how an attorney can help.