UCLA Study Says Uber, Lyft Drivers Struggling

Roman Schwartz
June 2, 2018

San Francisco's city attorney on Tuesday subpoenaed Uber Technologies Inc [UBER.UL] and Lyft Inc to turn over records relating to how the ride-hailing companies classify drivers, as well as driver wages, health care and other benefits, the latest demand in a year-long investigation.

San Francisco City Attorney Dennis Herrera (D) subpoenaed the two ride-sharing operations on Tuesday for records on whether they treat their drivers as independent contractors or full-time employees.

The request comes after a California Supreme Court ruling that set new requirements for companies using independent contractors, including that they provide fair wages and benefits. In doing so, it could force companies like Uber and Lyft to provide benefits to drivers who are now considered contractors.

"San Francisco's laws help ensure that employers provide a fair day's wage for a fair day's work", said Herrera, as reported by the San Francisco Chronicle.

Classifying drivers as contractors also means they are at the mercy of algorithms, which push fares (and drivers' earnings) down for passenger convenience. "We are not going to tolerate any company shirking its responsibility to pay for benefits and shifting that burden onto taxpayers when drivers without health insurance turn to the emergency room".

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The state's high court in its ruling in April adopted the "ABC" standard: A worker can be considered an independent contractor only when a company can show the worker controls his or her work; that the worker's duties go beyond what the business normally does; and when the worker "is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity".

Local taxi drivers shared difficulties since the arrival of Uber and Lyft with members of the Syracuse Common Council's Airport (Public Transportation) committee at a contentious meeting at City Hall on Wednesday afternoon.

Uber declined to comment.

"The risk that workers who should be treated as employees may be improperly classified as independent contractors is significant in light of the potentially substantial economic incentives that a business may have", the court ruled.

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