San Francisco City Hall fired the first shot in what may be a prolonged battle over the legal employment status of drivers for popular ride-hail companies Uber and Lyft.
San Francisco City Attorney Dennis Herrera announced that it had subpoenaed the records of drivers from both companies going back to 2015, Curbed San Francisco reports.
The move suggests the city is reconsidering the ride-hailing companies’ current classification of drivers as “independent contractors” under current labor laws. An April 30 ruling by the California Supreme Court clarifying the difference between independent contractors and employees gave municipalities more enforcement muscle in determining whether companies are meeting state standards, Curbed San Francisco said.
“San Francisco’s laws help ensure that employers provide a fair day’s wage for a fair day’s work,” Herrera told the San Francisco Chronicle, adding that laws also guarantee benefits like sick leave, health care and paid parental leave. “We are not going to turn a blind eye if companies in San Francisco deny workers their pay and benefits.”
Herrera requested the following data from the two companies:
- A complete list of drivers who began or ended at least one ride in San Francisco from 2015 to the present;
- Documentation showing whether the company classifies those drivers as an employee or an independent contractor for purposes of San Francisco and/or California law;
- Documentation on hours, wages, health care payments and other benefits for drivers classified as employees;
- Proof that any driver classified as an independent contractor meets […] criteria set by the California Supreme Court.
If the city finds that state standards are not being met, actions by the city or lawsuits challenging the companies’ current employment classification of its drivers as independent contractors will “almost certainly follow,” according to Curbed San Francisco. It would require strong maneuvers to force such a shift, since most drivers have signed on to binding arbitration, which removes their ability to join in on a class-action lawsuit, Bill Gould, a law professor emeritus at Stanford and former chair of the National Labor Relations Board, told the Chronicle.
San Francisco is not the only city wrestling with employment issues faced by independent contractors. As Next City reported, New York City’s pioneering Freelance Isn’t Free Act, passed in 2017, has proved a boon for freelancers across a wide array of industries. A 2018 report from the state Department of Consumer Affairs determined that freelancers who filed complaints had recovered $254,866 in back payments. The Freelance Isn’t Free Act requires contracts for services worth $800 and up and payment within 30 days of service (unless otherwise specified in the contract).
As for Uber and Lyft drivers, the difference in employment status can be substantial, since independent contractors do not enjoy the expanded rights and benefits of company employees. A 2015 analysis done by finance website NerdWallet, reported by Next City, estimated that if classified as employees, Uber drivers in six major cities in the country would receive paid holidays and healthcare benefits worth an average of $5,500 annually, plus thousands more dollars in mileage reimbursement.
Alexis Lipsitz Flippin is a writer and editor living in New York City.