This archive report was first published on 6 August 2020.
On August 6, 2020, California's Labor Commissioner's Office announced that the state has filed lawsuits against Uber and Lyft for alleged wage theft by misclassifying their drivers as independent contractors rather than employees.
According to California labor law, workers are considered employees unless they are free from the company's control and perform work outside its usual line of business. The law challenges the business model of the San Francisco-based rideshare platforms and others which depend on workers taking on 'gigs' as independent contractors.
California's lawsuits seek to recover amounts owed to all Uber and Lyft drivers, including nearly 5,000 drivers who have filed claims for owed wages. The Labor Commissioner's Office stated that classifying drivers as independent contractors 'has deprived these workers of a host of legal protections in violation of California labor law.'
Uber and Lyft each have around 100,000 drivers, the Labor Commissioner's Office said. Uber has long argued it is merely a platform linking self-employed drivers with riders.
However, California labor commissioner Lilia García-Brower said, 'The Uber and Lyft business model rests on the misclassification of drivers as independent contractors. This leaves workers without protections such as paid sick leave and reimbursement of drivers' expenses, as well as overtime and minimum wages.'
Uber spokesman Davis White responded, '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's core ride-sharing operations have been hit hard by the global pandemic. The firm is due to announce its second-quarter results on Thursday.
