Drivers’ Lawsuit Claims Uber and Lyft Violate Antitrust Laws

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A group of drivers said Tuesday that Uber and Lyft are engaging in anti-competitive practices by setting the prices customers pay and limiting drivers’ ability to choose which rides they take without penalty.

Drivers, backed by advocacy group Rideshare Drivers United, have launched a new legal argument in a state lawsuit that addresses the longstanding debate over the job status of workers in the gig economy.

For years, Uber and Lyft have argued that their drivers should be considered independent contractors and not employees under labor laws, meaning they would be responsible for their own costs and generally not eligible for insurance under unemployment or medical benefits. In return, the companies argued, drivers could set their own hours and be more independent than if they were employees.

But in their complaint, which was filed in the San Francisco Supreme Court and seeks class action status, the three drivers allege that Uber and Lyft, by treating them as independent contractors, have not really given them independence and are trying to keep drivers away from benefits and protection. employment status while setting limits on how they work.

“They make up the rules as they go. They don’t treat me like an independent, they don’t treat me like an employee,” said one of the plaintiffs, Taje Gill, a Lyft and Uber driver in Orange County, California. “You are somewhere in no man’s land,” he added.

In 2020, Uber and Lyft called on drivers and voters to support California voting measure this would fix the status of the drivers’ independent contractors. The companies said the measure would help drivers by giving them flexibility, and Uber also began to allow drivers in California to set their own rates after the state passed a law Requiring companies to treat contract workers as employees. Drivers thought the new flexibility was a sign of what life would be like if voters approved the voting law, Proposition 22.

Drivers were also given increased visibility into where passengers wanted to go before they had to agree to a ride. Voting measure taken in front of a judge flipped it.

The following year, the new driver options were rolled back. Drivers say they have lost the ability to set their own fares and must now meet the requirements – for example, accept five out of every 10 trips – to see details of trips before accepting them.

Drivers said they now lack both the benefits of being an employee and the benefits of being an independent contractor. “I don’t think it’s fair or reasonable,” Mr. Gill said.

Not being able to view a passenger’s destination before agreeing to travel is particularly burdensome, drivers say. This sometimes results in unforeseen overnight trips to remote airports or remote locations that are not cost effective.

“Millions of people choose to make money on platforms like Uber because of their unique independence and flexibility,” said Noah Edwardsen, spokesman for Uber. “This complaint misinterprets both the facts and applicable law, and we intend to defend ourselves accordingly.”

Lyft spokeswoman Jody Seth said in a statement, “Voters in California overwhelmingly supported a selective measure that gives drivers what they want and can’t get in traditional employment: flexibility and independence.” She added, “The Lyft platform provides valuable opportunities for drivers in California and across the country to get paid when and how they want.”

The lawsuit asks drivers to stop Uber and Lyft from “fixing the price of sharing services” and “hide fare and destination data from drivers when giving them rides,” and to require drivers to provide “transparent mileage information.” , pay by the minute, or pay per ride” rather than using “hidden algorithms” to determine compensation.

Drivers are suing under antitrust law, alleging that if they are classified as independent contractors, then Uber and Lyft are interfering in the open market by limiting their work and the amount of payment from their passengers.

“Uber and Lyft are either employers accountable to their employees under labor standards laws, or are bound by laws that prevent powerful corporations from using their bargaining power to set prices and other actions that limit fair competition,” the lawsuit says.

Experts said it would be a long ordeal before a federal court complaint because judges routinely use the “rule of reason” to weigh antitrust claims against consumer welfare. Federal courts often allow potentially anti-competitive practices that may benefit consumers.

For example, Uber and Lyft may argue that apparent restrictions on competition help reduce waiting times for customers by ensuring there are enough drivers. The lawsuit alleges that allowing drivers to set their own prices is likely to result in lower fares for customers, as Uber and Lyft retain a significant portion of fares and what customers typically pay. has little to do with What do drivers earn?

Be that as it may, the courts in California could have treated at least some of the allegations in the complaint more favorably, experts say.

“If you apply some laws mechanically, it’s very beneficial for a plaintiff in state court and, in particular, under California law,” said Josh P. Davis, head of Berger Montague’s San Francisco Bay Area office.

“You can meet a judge who says, “This is not a federal law. It’s state law. And if you apply it in a simple way, cut down on all the complexities of the gig economy and look at it, we have a law that says you can’t do that,” Mr. Davis said.

Peter Carstensen, professor emeritus of law at the University of Wisconsin, said he is skeptical that drivers will receive support with his claims that Uber and Lyft illegally set the prices that drivers can charge.

But Mr Carstensen said a state judge could rule in favor of plaintiffs over other so-called vertical restraints, such as incentives that help tie drivers to one of the platforms, such as guaranteeing them at least $1,000 if they complete 70 rides. Monday through Friday. The judge may conclude that these incentives are largely there to reduce competition between Uber and Lyft, he said, because they make drivers less likely to switch platforms and make it harder for drivers to be hired by the new gigoplatform.

“You make it extremely difficult for a third party to access,” Mr. Carstensen said.

David Seligman, an attorney for the plaintiffs, said the lawsuit could benefit from more scrutiny of anticompetitive practices.

“We believe that politicians, lawyers and courts across the country are paying more attention and looking more closely at the ways in which dominant companies and corporations abuse their position in the labor market,” Mr. Seligman said.

Drivers say giving up options like setting their own prices has made it harder to earn a living as a worker, especially in recent months when gas prices have risen and as competition among drivers has begun to return to pre-pandemic levels.

“Making money is getting harder,” said another plaintiff, Ben Valdez, a driver from Los Angeles. “Enough is enough. A man can’t take much.”

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