Gig work: Law­suit chal­lenges Uber, Lyft driver sta­tus

San Francisco Chronicle - - BAY AREA - By Carolyn Said

A Cal­i­for­nia agency sued Uber and Lyft on Wed­nes­day for al­leged wage theft in the lat­est le­gal salvo over whether driv­ers should be em­ploy­ees un­der AB5, the state’s new gig­work law.

Cal­i­for­nia’s la­bor com­mis­sioner, Lilia Gar­cía-Brower, said she is su­ing the com­pa­nies “for com­mit­ting wage theft by will­fully mis­clas­si­fy­ing driv­ers as in­de­pen­dent con­trac­tors in­stead of em­ploy­ees,” ac­cord­ing to a post on her web­site.

The Alameda County Su­pe­rior Court law­suits seek “to stop the two com­pa­nies from mis­clas­si­fy­ing their driv­ers and al­low the La­bor Com­mis­sioner to re­cover un­paid wages and other com­pen­sa­tion that driv­ers are en­ti­tled to.”

Uber said that re­cent changes it made, such as al­low­ing driv­ers to set fares as mul­ti­ples of the base fare, mean its driv­ers are truly in­de­pen­dent.

“The vast ma­jor­ity of Cal­i­for­nia driv­ers want to work in­de­pen­dently, and we’ve al­ready made sig­nif­i­cant changes to our app to en­sure that re­mains the case un­der state law,” Uber said in a state­ment. “When 3 mil­lion Cal­i­for­ni­ans are

with­out a job, our lead­ers should be fo­cused on cre­at­ing work, not try­ing to shut down an en­tire in­dus­try.”

Lyft said in a state­ment: “The state la­bor agency has botched thou­sands of claims. They know they don’t have the abil­ity to process these claims, so they sent them into a le­gal abyss, where they know it will take years to re­solve them.”

The la­bor com­mis­sioner’s move comes a day be­fore a San Fran­cisco Su­pe­rior Court hear­ing on a sep­a­rate state law­suit against the com­pa­nies filed by At­tor­ney Gen­eral Xavier Be­cerra and three city at­tor­neys in May.

At Thurs­day’s hear­ing, Be­cerra will seek an in­junc­tion forc­ing im­me­di­ate re­clas­si­fi­ca­tion of driv­ers even be­fore a trial, while Uber and Lyft will seek to have the case post­poned un­til vot­ers weigh in on their Novem­ber bal­lot ini­tia­tive, Propo­si­tion 22, which would keep driv­ers as in­de­pen­dent con­trac­tors en­ti­tled to some wages and ben­e­fits. Uber will also ask to sep­a­rate its case from that of Lyft.

Fil­ing the la­bor com­mis­sioner law­suit on the eve of the Su­pe­rior Court hear­ing ap­pears strate­gic, said Veena Dubal, a law pro­fes­sor at UC Hast­ings who stud­ies driv­ers and ad­vo­cates for them be­ing em­ploy­ees.

“The state is do­ing this all at once as a con­certed ac­tion to show the state’s con­vic­tion around the re­al­ity that these com­pa­nies have been mis­clas­si­fy­ing their work­ers,” she said. “It gives ad­di­tional pub­lic and po­lit­i­cal weight for an in­junc­tion.”

Uber and Lyft clas­sify their hun­dreds of thou­sands of driv­ers as in­de­pen­dent con­trac­tors, say­ing that the flex­i­bil­ity is key to their busi­ness model. Em­ploy­ment would cost the money­los­ing com­pa­nies many mil­lions of dol­lars, and they say con­sumers would feel that in higher rates and fewer cars on the road. They point to polls in which tens of thou­sands of driv­ers say they pre­fer the flex­i­bil­ity.

But some driv­ers re­ject that clas­si­fi­ca­tion. At least 5,000 driv­ers have taken mat­ters into their own hands to seek em­ployee sta­tus. They filed wage claims with the la­bor com­mis­sioner in re­cent months, seek­ing com­pen­sa­tion for min­i­mum wage, over­time and busi­ness ex­penses. Those claims to­tal $1.35 bil­lion for pay plus dam­ages, said Ni­cole Moore, an or­ga­nizer with Rideshare Driv­ers United, a driver ad­vo­cacy group that helped the driv­ers with their claims.

“It’s a proud day for driv­ers,” said Moore, who drove part­time for Lyft for over two years, and cal­cu­lates she is owed $60,000. She has not driven since the pan­demic out of health con­cerns. “The frus­tra­tion, the anger, the de­spair has turned into fight­ing back. It has been in­cred­i­ble team­work from across the state of driv­ers join­ing to­gether to say, We can change this.”

The la­bor com­mis­sioner’s of­fice wrote to those 5,000 driv­ers on Wed­nes­day to no­tify them about its law­suits, which will take the place of their in­di­vid­ual claims.

The case ap­plies to all Uber and Lyft driv­ers.

“By fil­ing the law­suits, the La­bor Com­mis­sioner will be ask­ing the court to or­der Uber and Lyft to stop mis­clas­si­fy­ing their driv­ers as in­de­pen­dent con­trac­tors and to pro­vide all driv­ers with the pro­tec­tions avail­able to em­ploy­ees un­der the La­bor Code,” the let­ter said.

The law­suits are seek­ing “un­paid min­i­mum wages for all hours worked, rest pe­riod wages, un­paid over­time wages, liq­ui­dated dam­ages due for min­i­mum wage vi­o­la­tions, item­ized wage state­ment vi­o­la­tions, paid sick leave vi­o­la­tions, penal­ties for fail­ure to pay all wages due dur­ing em­ploy­ment and at sep­a­ra­tion of em­ploy­ment, and re­im­burse­ment of busi­ness ex­penses.”

Brian Feul­ner / Spe­cial to The Chron­i­cle

A law­suit charges that Uber has mis­clas­si­fied driv­ers like PJ Ah­ern as in­de­pen­dent con­trac­tors.

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