A group of drivers alleged on Tuesday that Uber and Lyft engaged in anti-competitive practices by setting the prices customers pay and limiting drivers’ ability to choose which rides they accept penalty-free.
The drivers, supported by the advocacy group Rideshare Drivers United, made the new legal argument in a state case that focuses on the long-running debate over the job status of workers in the gig economy.
For years, Uber and Lyft have argued that under employment law, their drivers should be considered independent contractors rather than employees, meaning they are responsible for their own costs and are not normally eligible for unemployment insurance or health benefits. In return, the companies argued, drivers could set their own hours and maintain more independence than if they were employees.
But in their complaint, which was filed in San Francisco’s Superior Court and seeking class action status, three drivers allege that, although Uber and Lyft treat them as independent contractors, they have not actually given them independence and are trying to prevent them from doing so. drivers the benefits and protection of employment status, while limiting the way they work.
“They make up the rules while they’re at it. They don’t treat me as independent, they don’t treat me like an employee,” said one of the plaintiffs, Taje Gill, a Lyft and Uber driver in Orange County, Calif. “You’re somewhere in no man’s land,” he added.
In 2020, Uber and Lyft campaigned for drivers and voters to get a ballot measure in California that would establish the status of independent contractor of drivers. The companies said such a move would help drivers by giving them flexibility, and so would Uber started letting drivers set their own rates in California after the state has passed a law require companies to treat contract workers as employees. Drivers thought the new flexibility was a sign of what life would be like if voters approved the ballot measure, Proposition 22.
Drivers also got a better view of where passengers wanted to travel before they had to accept the ride. The voting measure passed, before a judge knocked it over†
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The following year, the new driver options were rolled back. Drivers said they were no longer able to set their own fares and now must meet requirements – such as accepting five out of every 10 rides – to see details about travel before being accepted.
The drivers now said they missed both the benefits of an employee and those of an independent contractor. “I couldn’t see this as fair and reasonable,” said Mr Gill.
The inability to see a passenger’s destination before accepting the ride is particularly distressing, the drivers said. It sometimes leads to unexpected overnight trips to distant airports or remote destinations that are not cost effective.
“Millions of people choose to earn on platforms like Uber because of the unique independence and flexibility it offers,” Noah Edwardsen, an Uber spokesperson, said in a statement. “This complaint misinterprets both the facts and applicable law, and we intend to defend ourselves accordingly.”
A Lyft spokeswoman, Jodi Seth, said in a statement: “California voters overwhelmingly supported a ballot measure that delivers what drivers want and can’t get through traditional employment: flexibility and independence.” She added, “Lyft’s platform offers drivers in California and across the country valuable opportunities to earn pay when and how they want.”
In the lawsuit, the drivers demand that Uber and Lyft be barred from “fixing prices for ride-share services” and “withholding drivers’ ride and destination information when presenting rides to them” and are required to provide drivers “transparent kilometers per mile”. , pay per minute or per ride” instead of using “hidden algorithms” to determine the fee.
The drivers are suing on antitrust grounds that if they are classified as independent contractors, Uber and Lyft will disrupt an open market by limiting how they operate and how much their passengers are charged.
“Uber and Lyft are either employers responsible to their employees under labor standards laws, or they are bound by laws that prohibit powerful companies from using their market power to set prices and engage in other behaviors. that stands in the way of fair competition,” the lawsuit says.
Experts said the complaint would be a drag in federal court, where judges typically use a “rule of reason” to weigh antitrust claims against consumer welfare. Federal courts often allow potentially anticompetitive practices that are demonstrably beneficial to consumers.
For example, Uber and Lyft could argue that the apparent constraints of competition help reduce wait times for customers by ensuring an adequate supply of drivers. According to the lawsuit, allowing drivers to set their own prices would likely lead to lower fares for customers, as Uber and Lyft keep a significant portion of the fares and what customers typically pay. has little relationship on what drivers earn.
Either way, California courts could be more sympathetic to at least some of the claims in the complaint, the experts said.
“Making some laws mechanically is very beneficial to the plaintiff in a state court and in particular under California law,” said Josh P. Davis, chief of the San Francisco Bay Area office for the Berger Montague firm.
“You might get a judge who says, ‘This is not a federal law. This is state law. And if you apply it in a simple way, take out all the complexities of the gig economy and look at this thing, we have a law that says you can’t do this,” said Mr. davis.
Peter Carstensen, a law professor emeritus at the University of Wisconsin, said he was skeptical the drivers would come to grips with their claims that Uber and Lyft were illegally setting the price drivers could charge.
But Mr Carstensen said a state judge could rule in the plaintiffs’ favor over other so-called vertical restraints, such as the incentives that help tie drivers to one of the platforms by, say, guaranteeing them at least $1,000 if they drive 70 between Monday and Friday. A judge may conclude that these incentives exist largely to reduce competition between Uber and Lyft, he said, because they make drivers less likely to switch platforms and make it harder for a new gig platform to hire drivers. .
“You’re making it extremely difficult for a third party to get in,” Mr. Carstensen said.
David Seligman, an attorney for the plaintiffs, said the lawsuit could benefit from more investigation into anticompetitive practices.
“We think policymakers, lawyers and courts across the country are paying more attention and looking more closely at the ways in which dominant firms and corporations abuse their power in the labor market,” said Mr Seligman.
The drivers say that rolling back options, such as setting their own prices, has made it harder to earn a living as a gig worker, especially in recent months as gas prices have risen and as competition among drivers has begun to return to prepandemic levels.
“It’s getting harder and harder to make money,” said another plaintiff, Ben Valdez, a driver in Los Angeles. “Enough is enough. There is only so much a person can handle.”
