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Uber and Lyft Drivers No Independence and No Protections California Class Action

The complaint for this class action calls Uber Technologies, Inc. and Lyft, Inc. “a powerful duopoly” in control of the rideshare industry. The central issue: their extensive control, and whether drivers are independent contractors (as Uber and Lyft claim), who should therefore be able to set their own prices and make other independent decisions, or employees, who should be protected by existing labor and other laws.

The class for this action is all individuals living in California who have driven for Lyft and/or Uber in California, between July 28, 2018 and July 28, 2022, and who have opted out of Lyft’s and/or Uber’s arbitration agreements.

Early on, the complaint sets out its central contention: “Uber and Lyft are either employers responsible to their employees under labor standards laws, or they are bound by the laws that prohibit powerful corporations from using their market power to fix prices and engage in other conduct that restrains fair competition to the detriment of both drivers and riders.”

Both companies have insisted that their drivers are independent contractors, to the point of spending large amounts to back Proposition 22, a measure Californians were able to vote on, that made app-based companies exempt from certain employment requirements they would otherwise be bound by. (Proposition 22 passed, although it is currently in question: the complaint says a superior court found it unconstitutional and unenforceable, but that decision is currently on appeal.)

Among the complaint’s contentions is that, while drivers are supposed to be independent contractors, the companies do not give them economic independence, setting the prices they must charge customers for rides. The companies can this raise prices on customers while keeping driver pay low. The complaint alleges that this is vertical price fixing and per se illegal in California.

Also, the complaint alleges that driver pay is kept so low, drivers must compete in game-like series that offer higher pay if they can complete a certain number of rides within a limited period of time. The competitions prevent them from switching companies, the complaint claims, and don’t allow them to see clearly which company actually pays more.

According to the complaint, the companies also raise fares in certain situations and/or in certain areas, but they also don’t raise driver compensation in proportion, and their other rules can prevent drivers from qualifying for any increase in pay. In addition, drivers are paid only for driving fares, and are not compensating for waiting or “deadhead” time.

“Of course,” the complaint alleges, “if Uber and Lyft conceded that their drivers are employees protected by labor standards, they could exert control of this sort. Firms can set the prices their employees charge customers, and they can dictate when and where their employees work.” In reality, the complaint claims, drivers have little to no control, yet do not receive the protections of things like minimum wages and unemployment insurance.

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

Uber and Lyft Drivers No Independence and No Protections California Complaint

July 28, 2022

The complaint for this class action calls Uber Technologies, Inc. and Lyft, Inc. “a powerful duopoly” in control of the rideshare industry. The central issue: their extensive control, and whether drivers are independent contractors (as Uber and Lyft claim), who should therefore be able to set their own prices and make other independent decisions, or employees, who should be protected by existing labor and other laws.

Uber and Lyft Drivers No Independence and No Protections California Complaint

Case Event History

Uber and Lyft Drivers No Independence and No Protections California Complaint

July 28, 2022

The complaint for this class action calls Uber Technologies, Inc. and Lyft, Inc. “a powerful duopoly” in control of the rideshare industry. The central issue: their extensive control, and whether drivers are independent contractors (as Uber and Lyft claim), who should therefore be able to set their own prices and make other independent decisions, or employees, who should be protected by existing labor and other laws.

Uber and Lyft Drivers No Independence and No Protections California Complaint
Tags: Price fixing, Unfair Competition, Vertical Price Restraints