Updating a blog post we brought you earlier this year, two separate class action lawsuits against Uber and Lyft will go to trial before juries.
According to the Los Angeles Times, Judges Edward Chen and Vince Chhabria said in separate rulings in a San Francisco federal court recently that juries will have to determine the status of each company’s drivers. Drivers have accused the companies of misclassifying them as contractors instead of employees, denying them items like “minimum wage, reimbursement for expenses, overtime and other benefits.”
Both Uber and Lyft, which provide ride-hailing application services, classify drivers as contractors and require them to pay for expenses out-of-pocket. If a jury decides that the drivers are employees, it could have a drastic impact on the model for both businesses.
Keep in mind, in California, the companies may have to reimburse employees for expenses like gas, tolls and insurance. The companies would also have to pay for unemployment insurance, Social Security and workers’ compensation coverage for the drivers.
“Aside from increasing the cost of doing business, the ruling could affect the valuations of both companies and similar start-ups, which rely heavily on contracted individuals to provide services that are core to their business,” the Times reported.
The drivers claim that they are an integral part of the business models for both companies and should be provided employee benefits.
Talking to an Attorney About Misclassification
It is not uncommon for drivers, including truckers in California, to take legal action when they are wrongfully misclassified as independent contractors. Many transportation providers do this as a way to cut costs. It is sad that it may be becoming a practice in the tech community.
If you believe that your employment status is misclassified, it may be in your best interest to speak to an attorney. Our firm can investigate your case and determine if an employer is illegally classifying you as an independent contractor.
Keep following our blog for California labor news.
Kesluk, Silverstein & Jacob– Los Angeles employment attorneys