Class Action Lawsuits Allege Mislassification of Employees
Uber and Lyft will be facing class action lawsuits due to two separate lawsuits filed in San Francisco federal court. The suits, originally filed in 2013, are seeking class-action status and are now making their way through the courts. The reason for the lawsuits–some Uber and Lyft drivers allege they have been misclassified as independent contractors when they should be classified as employees, and therefore eligible for overtime and minimum wage.
Furthermore, beyond allegations they should have full employee status, the plaintiffs are seeking reimbursement for expenses including gasoline and car maintenance costs, which they would normally receive if they had employee standing in California. Since drivers for both companies are currently classified as independent contractors, they cover these costs themselves.
According to court documents in the Uber lawsuit, Uber allegedly advertises that the cost of the service includes gratuities, but does not forward the full amount of the gratuity to drivers. Similar allegations were made in the Lyft lawsuit, with plaintiffs arguing that Lyft takes 20 percent of drivers' tips for “administrative fees.”
Software Company or Taxi Company
Both Uber and Lyft are on-demand transportation, or ride-hailing companies, operating similarly to a taxi company. Due to their business model and ensuing operations, both companies have argued that they are actually software companies, with riders using the respective apps to request rides. Users then choose drivers based on which one is the first to respond to the request.
However, US District Judge Edward Chen, in San Francisco, said he did not find it convincing that Uber is simply a software platform. In the Lyft case, US District Judge Vince Chhabria indicated that he might also consider Lyft's drivers “employees”.
Among the issues considered by the judges were how much control Uber and Lyft have over their drivers and their drivers' work schedules. Uber, for example, sets the rate of pay for drivers and would not make money without the drivers. And while neither Uber nor Lyft own their own vehicles, plaintiffs in the Lyft lawsuit argued they were warned they could be terminated if they did not accept enough jobs.
Lawsuits against both Uber and Lyft initially sought to represent drivers across the US, but the lawsuits were narrowed to California drivers only.
The Latest – Both Cases to be Heard by Jury
On March 11, 2015, U.S. District Judges Chen and Chhabria said in two rulings in San Francisco federal court that juries will have to determine the status of each companies' drivers.
For reference, the Uber lawsuit is O'Connor et al v. Uber Technologies Inc, et al, No. C-13-3826. The Lyft lawsuit is Cotter v. Lyft Inc., et al, No. 13-4065, US District Court, Northern District of California (San Francisco).
Experienced California Employment Lawyers
To further discuss these cases, or a potential claim on your behalf, feel free to contact leading California employment lawyers at Kingsley & Kingsley. Call toll-free at (888) 500-8469 or click here to contact us via email.