A group of drivers claimed Tuesday that Uber and Lyft engaged in anti-competitive practices by placing limits on the prices customers pay and drivers’ ability to choose which rides they accept without penalty.
The drivers, along with 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 support a California ballot that would establish drivers’ independent contractor status. The companies said such a measure would help drivers by giving them flexibility, and Uber even started allowing drivers in California to set their own fares as a sign of what life could be like if voters passed the ballot measure, Proposition 22 , approved.
Drivers also got a better view of where passengers wanted to travel before they had to accept the ride. The ballot measure was passed before a judge overturned it.
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The following year, the new driver options were rolled back. Drivers said they’ve lost the ability to set their own fares and now have to meet requirements — such as accepting five out of every 10 rides — to see details about trips before accepting them.
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.
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.
But 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, remove 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, a lawyer 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 rolling back options, such as setting their own prices, has made it more difficult to earn a living as a gig worker, especially in recent months as gas prices have risen and competition between drivers has started back. 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.”
