California Is Suing Uber And Lyft

The Los Angeles Times is reporting that the state of California has filed a lawsuit against both Uber and Lyft. The lawsuit, brought on by state Attorney General Xavier Becerra (and also the Los Angeles, San Diego, and San Francisco city attorneys), alleges that "the ride-hailing companies have illegally treated their drivers as independent contractors, depriving them of worker protections and benefits such as minimum wage and unemployment insurance."

California is seeking restitution for unpaid wages owed to drivers. They've also requested that the court force both companies to classify their drivers as employees. According to the lawsuit, California is also alleging that by classifying the drivers as independent contractors, Uber and Lyft have failed to pay state and local payroll taxes that are used to fund state welfare programs.

As the Los Angeles Times adds, "The lawsuit comes after California’s Assembly Bill 5 took effect Jan. 1. The landmark law established stricter standards for which workers can be treated as independent contractors rather than employees, requiring companies to classify many as employees covered by minimum wage, overtime, workers’ compensation, unemployment, and disability insurance."

Before California's Assembly Bill 5 became effective, both companies worked to derail the bill. Also, days before January 1, Uber filed a suit alleging that, "AB 5 violates individuals’ constitutional rights and unfairly discriminates against technology platforms and those who make a living through such platforms."

Over the past few years, Uber and Lyft have both battled many lawsuits over their misclassification of workers. Since February alone, over 2,000 California drivers have filed claims against the companies for lost wages, expenses, and damages because they were wrongly classified as independent contractors.