City tells Uber, Lyft to provide driver pay info

Do Uber and Lyft stiff their drivers on wages? A legal push by the ride-hailing companies’ hometown of San Francisco could lead to the drivers becoming employees rather than independent contractors.

City Attorney Dennis Herrera subpoenaed the companies on Tuesday for records of driver pay and benefits, as well as their classification as independent contractors, rather than employees. The move follows a groundbreaking California Supreme Court decision that makes it harder for companies to claim that gig workers are not employees.

“San Francisco’s laws help ensure that employers provide a fair day’s wage for a fair day's work,” Herrera said, adding that laws also guarantee benefits like sick leave, health care and paid parental leave. “We are not going to turn a blind eye if companies in San Francisco deny workers their pay and benefits.”

Uber declined to comment.

“Lyft has a long track record of working col-

laboratively with policymakers, including the S.F. City Attorney, on important issues,” said spokesman Adrian Durbin in a written statement. “We look forward to helping the City Attorney’s office fully understand Lyft’s business model, including our relationship with drivers.”

Median Lyft driver earnings in San Francisco are more than $25 per hour before expenses, which typically range from $3 to $5 an hour, he said.

The city wants a complete list of drivers who worked in San Francisco since 2015 and information on their hours, wages and benefits. It seeks documentation on how they are classified and proof that those classified as independent contractors — virtually all drivers — meet the criteria set by the California Supreme Court decision.

Uber and Lyft fiercely resist attempts to make their drivers employees because such a move would increase their labor costs significantly. The recent state high-court ruling creates a tougher test for classification, but it would take either lawsuits or actions by cities such as San Francisco for widespread shifts to occur.

“Companies are never going to say, ‘OK, we’ll reclassify all our folks as employees,’ ” said Drew Amerson, a visiting assistant professor at UC Hastings’ Startup Legal Garage. “Typically that would happen as the product of a singledriver lawsuit or class action. The city attorney is shortcutting that process.”

Such a maneuver is even more vital because most Uber and Lyft drivers have agreed to binding arbitration, removing their ability to band together in a class-action lawsuit, said Bill Gould, a law professor emeritus at Stanford and former chair of the National Labor Relations Board, who’s writing a book on the gig economy.

“This is very important in circumventing these mandatory arbitration clauses,” he said. “It couldn’t come at a more propitious time in light of the recent U.S. Supreme Court ruling on arbitration, which virtually shut down private enforcement.”

While Herrera has not said what he’ll do once he gets the data, lawyers said the subpoena is likely a prelude to prosecuting Uber and Lyft over driver status.

“Reading the tea leaves, I assume he’s headed down that path,” said Aaron Kaufmann, a partner at labor-law firm Leonard Carder in Oakland. “If so, it could be very significant because he has the ability to get systemic relief, at least for drivers in San Francisco.”

Others said that any lawsuit would likely end up affecting all drivers in California.

The California Supreme Court’s ruling, which is not yet finalized, said workers can be independent contractors only if their tasks are outside the scope of the hiring company’s business, the company does not control how they work, and they run an independent business doing that work.

“To me it’s clear that under that test (ride-hailing drivers) come out as employees,” Kaufmann said. “Drivers provide the very services that Uber and Lyft are in the marketplace to provide. I think that’s what Dennis Herrera is banking on, and it’s a pretty good bet.”

Studies have shown that some drivers make less than minimum wage. If they were employees, Uber and Lyft would have to provide minimum wage, overtime, workers’ compensation and unemployment coverage, and reimbursement for business expenses like fuel and maintenance.

Uber, which is worth $62 billion, can afford to provide health care, Herrera said, noting that uninsured people often wind up in the emergency room with taxpayers picking up the tab for their care.

Herrera has been on a campaign to force Uber and Lyft to reveal more about their inner workings so he can see whether they comply with local laws. Last year, he issued subpoenas about their local operations, seeking to gauge their impact on traffic, access for disabled and low-income riders and other issues. In February, Lyft eventually complied with that subpoena, but Uber is fighting it.