UBER, LYFT SUED OVER USE OF ‘INDEPENDENT’ DRIVERS
Mass. AG accuses ride-share operators of misclassifying workers
The attorney general of Massachusetts has sued Uber and Lyft on allegations they misclassify workers as independent contractors, allowing them avoid paying for overtime hours and other costs.
Massachusetts AG Maura Healey sued in Suffolk Superior Court, citing Massachusetts wage and hour laws. Uber Technologies and Lyft face similar litigation in the state of California, where both companies have their headquarters in San Francisco.
To be classified as independent contractors under Massachusetts law, workers must have control of their working hours; perform duties “outside the usual course” of the business of a company; and otherwise work in the general trade that they provide to the company that is paying them on an external contractor basis.
The Healey lawsuit maintains that Uber and Lyft depend entirely on their drivers, and that those individuals are not “true independent entrepreneurs” with the ability to increase revenue meaningfully outside their work hours with the companies.
“Drivers are more akin to limousine drivers who use their own vehicles to provide (prearranged) rides through the companies that employ them ... rather than bona fide independent entrepreneurs with the ability to grow their businesses based on their individual abilities,” Healey said in the lawsuit.
‘Drivers don’t want this’
In a company statement, Uber said it would defend its business model in court if need be, while airing the goal of cooperating with Massachusetts on the issue of labor standards for drivers.
“This action ... flies in the face of what the vast majority of drivers want: to work independently,” the Uber statement reads. “We stand ready to work with the state to modernize our laws, so that independent workers receive new protections while maintaining the flexibility they prefer.”
In a May filing with the Securities & Exchange Commission, Uber stated it did not expect a material impact to its finances as a result of litigation.
In her office’s complaint, Healey maintains Uber and Lyft drivers are unable to negotiate terms of their contractual agreements and are forced to accept binding arbitration to resolve any grievances regarding wages. The Massachusetts lawsuit also claims that drivers are unable to reasonably set their own schedules due to a system of penalties for accepting too few rides, among other elements governing the driver contracts.
In a statement forwarded by a company spokesperson, Lyft maintains drivers “don’t want this” and says about nine in 10 of its contractors work 20 hours or less a week for supplementary income.
“This lawsuit threatens to eliminate work for more than 50,000 people in Massachusetts at the worst possible time,” the Lyft statement reads. “Many people turn to app-based platforms as a fallback after losing their job, which is especially important as Massachusetts faces an unemployment crisis where traditional jobs will be slow to come back.”
The two companies employed about 30,000 drivers in Connecticut according to testimony filed in February in the state General Assembly, when the Legislature’s Labor Committee took up consideration of a bill that would guarantee drivers at least 75 percent of the fares they generate. The bill would also force rideshare companies to report their quarterly revenue; and allow drivers to sue in state court and organize to push for labor standards without penalty. A similar bill in 2019 did not proceed to a vote.
Testifying in Hartford in February, the head of the Connecticut AFL-CIO described as “a persistent problem” the tendency of app-based, ondemand service providers like Uber and Lyft to classify workers as independent.
“In recent years, these companies have lowered fares charged to riders, decreasing drivers’ earnings,” stated Sal Luciano, president of the Connecticut AFL-CIO. “Drivers must also pay for car maintenance, insurance, and other driving-related costs out of their own pockets. After these expenses, a majority of Uber drivers make less than $10 an hour.”
Includes prior reporting by Emilie Munson.