Uber & Lyft Drivers Rally In CA As The State Sues Both Companies
On August 8, close to 50 Drivers from Uber and Lyft joined a caravan to rally outside the Uber Greenlight Hub in Oakland. The drivers were gathering for a set of demands from the company. The majort one being that the rideshare companies should classify their drivers as employees because their current treatment of Drivers does not resemble independent contractor status, except the one part where there is 100% time flexibility because of the abundance of Drivers in every city. Prop 22 seeks to exempt app-based companies from AB5 and would legally entitle them to classify their rideshare and delivery drivers as independent contractors but a large percentage of Drivers do not think this is the right way for them.
This rally took place immediately after Lilia Garcia-Brower, the CA Labor Commissioner filed two lawsuits against Uber and Lyft alleging willful misclassification of their Drivers as contractors to intentionally avoid obligations under California law to compensate and treat their Drivers better.
The Labor Commissioner is demanding that Uber and Lyft begin classifying their drivers as employees and is pursuing civil penalties against the two companies for failure to provide notice of employment-related information, and civil penalties as well as damages paid to drivers for failure to pay workers no less than minimum wage, failure to provide overtime compensation, paid rest periods, rest period premium pay, paid sick leave, failure to indemnify employees for business expenses, to provide itemized wage statements, and to timely pay earned wages during and after employment.
Proposition 22 on the other hand is also a meaningful document because Uber and other proponents of it point to striking surveys by Benenson Strategy Group and therideshareguy.com that have found that around 69% of drivers performed other work in addition to driving as of December 2015, that 71% of Uber and Lyft drivers would rather be designated as independent contractors than employees.
They say that 80% of all drivers work less than 20 hours a week, according to a report from the Berkeley Research Group.
“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,” said Uber spokesperson Davis White. When three million Californians are without a job, our leaders should be focused on creating work, not trying to shut down an entire industry.”
Edan Alva has been a major voice in many Driver demonstrations and drove with Lyft for 6 years until stopping on April 7th due to fear of the pandemic. Alva has a different take on Uber and Lyft’s motive around Prop 22.
“Prop 22 is a proposition created by gig companies for gig companies. It’s not meant to take care of drivers, it’s to make sure gig companies can continue to exploit drivers in spite of existing labor laws,” said Alva.
This lawsuit against the gig-economy companies allegs that they do not sufficiently establish that their drivers are “free from the control and direction of the hiring entity in connection with the performance of the work,” the first tenet of the “ABC” test created by AB5, which determines whether a worker is an employee or an independent contractor.
The lawsuit states: “From its start up in 2009…Uber made a calculated business decision to misclassify its drivers as independent contractors rather than employees. At all times since the inception of the business, defendants have continued to misclassify their drivers as a means of unlawfully depriving these workers a broad array of statutory protections applicable to employees, in direct contravention to California law.”
The lawsuit further alleges that Uber and Lyft do not sufficiently prove that drivers “performs work that is outside the usual course of the hiring entity’s business,” and that their drivers are not engaged in their own trade transporting passengers, which are the second and third part of the “ABC” test, respectively.
What is the lawsuit against Uber specifically?
For Uber specifically, the Garcia-Brower alleges that the Uber has created two completely new subsidiaries owned 100% by Uber called Rasier LLC and Raiser-CA LLC, to license Uber’s technology and hire drivers, acting as shell companies in a scheme designed to allow Uber to justify drivers’ status as independent contractors. Uber should be doing this themselves and Garcia-Brower sees no major reason for two LLCs to be completing the most important operations of Uber.
In doing this scheme, the lawsuit alleges, Uber unlawfully sought to avoid granting drivers rights as workers under California law, including paying drivers at least minimum wage, paying overtime, paid rest periods, reimbursing drivers for business expenses, and reporting wage information to the California EDD (Employment Development Department).
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