California is suing Uber and Lyft, accusing the ride-hailing companies of misclassifying their drivers

California is suing Uber and Lyft, accusing the ride-hailing companies of misclassifying their drivers
Gig workers protest in favor of Assembly Bill 5 in San Francisco.Megan Hernbroth/Business Insider


California on Tuesday filed a lawsuit against Uber and Lyft, accusing the ride-hailing firms of misclassifying workers in violation of a law passed by state legislators in the fall.

The lawsuit, brought by a consortium of city attorneys from Los Angeles, San Francisco, and San Diego, accuses the companies of evading "workplace standards" to avoid the cost of providing benefits like minimum wage, paid sick leave, and health insurance benefits.

"Uber and Lyft owe their drivers these benefits and protections," the lawsuit claims.

A representative for Uber accused lawmakers of obstructing Californians' access to work amid record unemployment triggered by the coronavirus pandemic.


"At a time when California's economy is in crisis with four million people out of work, we need to make it easier, not harder, for people to quickly start earning," the company said. "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."

A Lyft representative echoed those claims, and said it would work with lawmakers to find a solution.

"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, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever," the Lyft spokesperson said.

Signed into law in September 2019, Assembly Bill 5 codifies an existing legal framework, in the form of a three-part test, to determine if a worker can be classified as a contractor or not. If a company controls how a worker does the job, or if that job is a core of the company's business, they likely fall into the employee category.

In the months following Assembly Bill 5's passage, Uber, Lyft and other gig-economy startups like DoorDash vowed to fight the new law with a $90 million ballot drive. Protect App-Based Drivers and Services, an organization set up to fight the law, did not immediately return a request for comment.


The group has argued that a change in classification under the new law would strip workers of their flexibility, citing the overwhelming number of gig-workers who work less than full-time. They hope to gather enough signatures to force voters to decide in November if the law should stand.

"Forcing rideshare and delivery drivers to become employees, especially during a national crisis, will lead to the widespread elimination of work for drivers and the curtailment of services that millions of Californians rely on," the group said in March, as it began to deliver the first petitions.

Still, the state and other activists maintain that flexibility can still be offered if workers are considered employees.

"Both companies have launched an aggressive public relations campaign in the hopes of enshrining their ability to mistreat their workers, all while peddling the lie that driver flexibility and worker protections are somehow legally incompatible," the lawsuit reads.

This story is developing….

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