Uber and Lyft drivers claim the companies owe them more than $630 million in back wages by misclassifying drivers as contractors under California's new gig worker law

REUTERS/Brian SnyderUber and Lyft drivers organised a protest Thursday in Los Angeles and San Francisco.
  • Uber and Lyft drivers in California claim they’re owed more than $US630 million in back wages, driver advocacy group Rideshare Drivers United said in a press release Wednesday.
  • The drivers allege Uber and Lyft illegally misclassified them as independent contractors under California’s new gig worker law, AB5, which sets stricter standards for who can be considered a contractor.
  • The drivers hope to pressure California to enforce AB5 and require the companies to reclassify them as employees so they can qualify for unemployment insurance and receive wages they say they’re owed.
  • Uber and Lyft have fought aggressively to keep drivers as contractors since reclassifying them as employees would have a major impact on their business model.
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More than 2,500 Uber and Lyft drivers in California have filed wage claims against the companies since February, claiming they’re owed at least $US630 million in back wages, driver advocacy group Rideshare Drivers United said in a press release Wednesday.

Drivers say the companies illegally misclassified them as independent contractors under the state’s new gig worker law, Assembly Bill 5, which sets stricter standards around which workers companies can consider contractors instead of employees.

By filing the claims, drivers hope to pressure California to enforce AB5 so that they can become eligible for unemployment insurance, wages, expenses, and damages they say they’re owed and now desperately need as business plummets during the coronavirus pandemic.

“While these workers have been risking their lives by transporting nurses, paramedics, doctors, and other essential personnel, Uber and Lyft are shamefully doing everything they can to avoid paying their fair share to American society,” said TWU International President John Samuelsen.

“These drivers must get the help they deserve: immediate unemployment insurance during the pandemic and the proper enforcement of AB5 so that these massively wealthy corporations pay their workers the wages and benefits they deserve under California State Law,” Sameulsen said.

Uber and Lyft both refused to comment for this story, instead referring Business Insider to Stacey Wells, a spokesperson for the Protect App-based Drivers Services Coalition, a group funded largely by Lyft, Uber, and DoorDash that is seeking to reverse AB5 through a ballot measure and says it has the support of 55,000 drivers and delivery people.

“Forcing app-based rideshare and delivery drivers to become employees – which the vast majority have repeatedly said they do not want – will result in the widespread elimination of work for hundreds of thousands of Californians at the very worst possible time,” Wells said. “App-based rideshare and delivery services are especially important in a troubled economy to help people pick up earnings to make up for lost employment and income.”

Uber and Lyft have consistently argued that their drivers are still contractors, even under the new law, and have fought aggressively against efforts to reclassify them. Uber and food delivery company Postmates filed a lawsuit last December arguing AB5 is unconstitutional, while Uber, Lyft, and other gig work platforms have collectively contributed millions to support a California ballot measure that would reverse the law.

The fight over gig workers’ employment status has intensified over the past few years, with drivers saying they’re suffering from declining pay and an inability to access benefits like overtime, healthcare, paid sick leave, and compensation for business expenses that full-time employees often enjoy.

In response, lawmakers in several states have enacted legislation aimed at protecting gig workers, but the results have been mixed. After New York City imposed a minimum wage for rideshare drivers in 2019, Uber raised prices and limited drivers’ access to the app, and drivers saw business decline.

California’s AB5 has also faced criticism from workers in industries ranging from news media to trucking, who say companies have begun cutting jobs previously held by freelancers and independent contractors, rather than pay more by giving contractors full-time status.

The coronavirus pandemic has created a new urgency for gig workers, many of whom are working in environments that put them at higher risk of exposure to COVID-19 without the ability to take paid sick leave or file for unemployment. Uber and Lyft have set up ad hoc coronavirus sick pay programs, but drivers have found it difficult to get compensation them and many aren’t eligible for the programs. Uber lobbied Congress to make gig workers eligible for unemployment benefits as part of the $US2 trillion coronavirus stimulus package, but workers are already facing hurdles trying to claim those benefits.

Uber and Lyft did not immediately respond to requests for comment.

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