Kate Conger and Daisuke Wakabayashi,
New York Times Service
July 14, 2020
Uber and Lyft should treat their Massachusetts drivers as employees entitled to benefits, rather than misclassifying them as independent contractors, the state attorney general said in a lawsuit filed against transportation companies.
The lawsuit, released Tuesday, makes Massachusetts the second state after California to challenge the way Uber and Lyft classify drivers and could deal yet another blow to their business model. Maura Healey, the state attorney general, mailed the complaint to the Massachusetts Superior Court in Suffolk County.
Uber, Lyft, and other concert economy companies have maintained that their drivers are independent contractors who are not eligible for benefits such as sick leave, paid time off, and unemployment insurance. But companies are facing increasing pressure to reclassify drivers as employees, who would have more recourse to reject better working conditions and pay.
“Uber and Lyft have built their multi-billion dollar businesses while denying their drivers basic employee protections and benefits for years,” Healey said in a statement. “This business model is unfair and exploitative. We are seeking this court determination because these drivers have the right to be treated fairly. “
Massachusetts is asking the court to decide that Uber and Lyft drivers are, in fact, employees under state law. It is also seeking a court order to prevent companies from denying driver protection that is provided to employees.
An Uber spokesman, Matt Kallman, said in a statement: “We are going to challenge this action in court, as it runs counter to what the vast majority of drivers want: to work independently. We are ready to work with the been to modernize our laws so that freelancers receive new protections while maintaining the flexibility they prefer. ”
“This lawsuit threatens to cut jobs for more than 50,000 people in Massachusetts at the worst possible time,” said Julie Wood, a spokeswoman for Lyft. “Drivers don’t want this: Most drive just a few hours a week, and have chosen to drive using Lyft precisely because of the independence it gives them to earn money in their spare time.”
Although the Massachusetts law was enacted in 2004, the state had not attempted to enforce it against Uber and the other concert economy startups that have disrupted transportation, hospitality, and food delivery in the past decade. Instead, Uber drivers in Massachusetts have sought employment status through individual lawsuits and class action, but many of those cases have been pushed to arbitration or are still moving forward in the court system.
The state is now suing because of the coronavirus pandemic, officials from the attorney general’s office said. Work protections like paid sick leave, health insurance, and guaranteed earnings are especially valuable during a global health crisis. Uber and Lyft have said they will provide drivers with financial assistance for up to 14 days if they test positive for the virus or are forced to stay home. However, demand for travel has plummeted during the crisis, holding back many drivers’ ability to earn an income.
Some drivers welcomed the lawsuit and said it could improve working conditions.
“I believed the lie. I thought I was an independent contractor with my own business, but Uber and Lyft controlled how much they paid me, where it led, “said Felipe Martinez, president of the Boston Independent Drivers Guild, a group that advocates on behalf of Uber and Lyft Drivers. “I realized it was an employee in disguise.”
Uber and Lyft are also waging a legal battle in California, where the state’s attorney general and attorneys for the city of San Francisco, Los Angeles and San Diego sued the companies to enforce a state law, known as Bill 5 of the Assembly, which defines the workers in the concert economy as employees.
Massachusetts and California use similar legal tests to determine if the workers are contractors or independent employees. The laws in both states say that a worker must be classified as an employee if the employer controls the worker’s wages and hours, the worker performs a service that is a central part of the employer’s business, and the worker does not have an independently established business that do similar work. .
Uber has argued that its core business is technology, not rides, and therefore drivers are not a key part of their business. It has also adjusted its service in California since AB 5 went into effect on January 1, allowing drivers to view fares in advance and decline low-paid travel without paying a fine.
Uber, Lyft and DoorDash have also invested tens of millions of dollars in Proposition 22, a measure on the November ballot in California that, if passed, would exempt them from state labor law.
“We couldn’t be happier for Massachusetts to join us in this fight to protect vulnerable workers,” said Dennis Herrera, a San Francisco city attorney. “Under the law, their drivers are employees, it’s that simple.”
