Massachusetts has filed a lawsuit against Uber and Lyft, charging that by classifying their drivers as independent contractors, the ride-hailing companies have violated state law.
Massachusetts Attorney General Maura Healey's office is looking to force Uber and Lyft to classify their drivers as employees, which would guarantee drivers access to a steady paycheck and minimum wage—protections that are not granted to contractors. The reclassification would also require Uber and Lyft to pay out unemployment taxes and worker's compensation, Healey said in a live-streamed press conference on Tuesday.
Healey's office is also asking for a court order that would grant drivers access to overtime, earned sick time and anti-retaliation protections.
"We're suing because these companies have built their billion-dollar business on a model that misclassifies drivers as independent contractors instead of employees," Healey said during the press conference. "For years, these companies have systematically denied their drivers basic workplace protections and benefits and profited greatly from it. This business model is unfair, and it's also illegal under Massachusetts law."
The lawsuit, made public Tuesday, makes Massachusetts the second state after California to bring Uber and Lyft to court over the status of their drivers. The California Attorney General's Office previously sued the companies to enforce recently enacted California state law Assembly Bill 5, which defines gig-economy workers as employees.
Uber, Lyft and other gig-economy companies have long maintained that their drivers are contractors. In September, in a refusal to comply with Assembly Bill 5, Uber argued that its drivers "operate outside the usual course of Uber's business" and are not essential to its model.
Healey is ready to dispute that.
"Drivers provide a service that is essential to Uber and Lyft's core business. They're driving," Healey said. "Without their drivers, Uber and Lyft as we know wouldn't exist."
Lyft did not respond to a request for comment from BostInno but issued the following statement to the New York Times: "This lawsuit threatens to eliminate work for more than 50,000 people in Massachusetts at the worst possible time,” Lyft spokeswoman Julie Wood said. "Drivers don’t want this — most drive only a few hours a week, and they have chosen to drive using Lyft precisely because of the independence it gives them to make money in their spare time."
Uber made a similar argument in a statement emailed to BostInno.
"At a time when Massachusetts’ economy is in crisis with a record 16% unemployment rate, we need to make it easier, not harder, for people to quickly start earning an income," Uber spokesperson Alix Anfang said. "We will contest this action in court, as it flies in the face of what the vast majority of drivers want: to work independently. We stand ready to work with the state to modernize our laws, so that independent workers receive new protections while maintaining the flexibility they prefer."
The lawsuit comes just over a year after the Boston Independent Drivers Guild, a coalition of drivers for ride-hailing companies like Uber and Lyft, organized a strike to protest what the drivers said were unfair labor practices. Their demands included transparency in how fares are broken down, a driver representative on Uber’s board, regulatory standards around issues like carbon emissions and traffic data and above all, better wages.
A study in late 2018 found that median hourly pay with tip for Uber drivers in the U.S. was just $14.73—above the minimum wage in Boston, but below it in cities like San Francisco and New York.
"These companies are not abiding by state law, and drivers are paying the price," Healey said.
