A controversy that has dogged Uber and Lyft for years has been how the drivers that they employ are classified. This question has been raised in courts across the world with varying results. One particular impact on this legal debate has been the Covid-19 pandemic.

This category of gig workers and independent contractors who could receive employment status extends beyond just ridesharing services. Drivers under the Uber and Lyft umbrellas also include food delivery drivers, such as those who drive for DoorDash, Postmates, Uber Eats, Instacart, and others.

With the pandemic causing lockdowns and stay in place orders, many drivers could no longer earn a living. However, since they were classified as either independent contractors or gig workers, they were not eligible for many of the benefits of proper employees including unemployment. 

For an example of the fraught legal contest over the classification of gig workers, California shines the brightest. In 2019, the California legislature passed legislation that classified gig workers as employees, not independent contractors. This initiative subjected all ridesharing and delivery app companies to treat their drivers in accordance with California labor laws, including minimum wage laws. 

This law was challenged by companies like Uber and Lyft and in October 2020, a California state Court of Appeals found that Uber and Lyft must classify their drivers as employees rather than independent contractors and that their failure to do so violated state labor laws. This victory was later backtracked when the California law classifying gig workers as employees was overwritten by a voter initiative Proposition 22. In November 2021, Prop 22 reclassified gig workers once again as independent contractors, although some ridesharing companies announced new policies to allow their drivers limited minimum wage protection and healthcare credit systems.

Prop 22 was challenged in the courts and eventually a ruling was reached. In August 2021, California Superior Court Judge Frank Roesch found prop 22 to be against the California state constitution and its tenets unenforceable. In justifying his decision, Judge Roesch cited the $200 million that companies like Uber, Lyft, Instacart, and Doordash funneled into campaigning materials and noted that Prop 22 created illegal prohibitions preventing drivers from unionizing. Judge Roesh wrote “A prohibition on legislation authorizing collective bargaining by app-based drivers does not promote the right to work as an independent contractor, nor does it protect work flexibility, nor does it provide minimum workplace safety and pay standards for those workers.” However, Prop 22 has since been challenged again and as of April 2023, the case is under review by the California Supreme Court.

This is not the first loss that companies like Uber and Lyft have suffered in the courts. In March 2021, it was reported that the United Kingdom’s Supreme Court upheld a ruling that Uber’s drivers were legally not independent contractors. This decision to classify drivers as “workers,” a legal middle ground between employees and independent contractors that has no U.S. analogue, entitled drivers to minimum wage, holiday pay and pension plans.

In December of 2021, the European Union passed regulations that similarly reclassified drivers. Under the new regulations, drivers would either be classified as employees, or they would be required to give additional benefits such as vacation time and pensions. Although companies like Lyft, Uber, Instacart, and others have repeated publicly that no company could possibly afford these restrictions and obligations to their business, investors are being fed a different story behind closed doors. 

During a fireside chat hosted on December 14, 2021, by UBS, a Swiss bank, The CEO of Uber Dara Khosrowshahi stated that “There’s a lot of demand for our technology, our service, our brand, our safety, our reliability. So any model can work economically for us.” Despite the seeming ease of profit in any economic climate, Uber and others continue to spend millions of dollars campaigning for legal enforcement of the “independent contractor” title and prohibition of unionizing in states including Illinois, Massachusetts, and New York.

The consistent ideological arguments at play are protection versus profits. Advocates for rideshare employees like Uber and Lyft often state the increased protections for employees, such as company payment of social security, health care options, 401k possibilities, and other benefits typically afforded to full-time workers potentially extending to minimum wage promises. Those siding against classifying Uber and Lyft drivers as employees cite the potentially prohibitive costs of operating a business with that many employees. 

In addition to all the benefits to drivers, there are significant risks to the parent company if drivers were to be considered full employees. Among the many things that would change if Uber, Lyft, and other ridesharing drivers were treated as employees would be liability. 

Broadly speaking under most circumstances, an employer is not liable for the behavior of an independent contractor. This creates an uphill battle for consumers who have suffered from the negligence or abuse of an Uber or Lyft driver. With the broad protections offered to companies like Uber or Lyft, they cannot be found liable for the poor conduct of their drivers, even if that poor conduct includes assault, kidnapping, or injury through reckless driving. 

A 2019 safety report released by Uber showed that their company was connected to 6,000 incidents of sexual assault alone. Many victims and drivers have filed suit against Uber, seeking damages and increased accountability to ensure a safer service for everyone involved.

If you or a loved one have experienced injury or trauma as a result of using any of these services, you may be eligible to receive compensation. Thousands of users who have been hurt by the negligence of these companies are filing lawsuits against Uber, Lyft, and others for hiring dangerous, unqualified, or predatory drivers without properly screening them or warning consumers of the potential risks. 

If you file suit, you could receive a financial award for past and future damages or expenses. This category of lawsuits is typically handled by attorneys who work on contingency. That means that you never pay the attorney, they only receive a set percentage of the final award. Contingency guarantees that if you don’t win, you don’t pay. 
Don’t wait. Contact Select Justice today for a free consultation and begin your journey to justice.