Driver lawsuits violate Uber and Lyft antitrust laws

On Tuesday, a group of drivers alleged that Uber and Lyft are engaging in anti-competitive practices by capping the prices customers pay and limiting drivers’ ability to choose which rides they accept without penalty.

Drivers, backed by advocacy group Rideshare Drivers United, have presented the new legal argument in a state lawsuit targeting the long-running debate over the employment status of temporary jobs economy workers.

For years, Uber and Lyft have argued that their drivers should be considered independent contractors rather than employees under labor laws, which means they will be responsible for their own expenses and are not usually eligible for unemployment insurance or health benefits. In contrast, the companies have argued, drivers can set their own working hours and maintain greater independence than they could if they were employees.

But in their complaint, which was filed in San Francisco Supreme Court and is seeking class action status, three drivers claim that Uber and Lyft, while being treated as independent contractors, have not truly given them autonomy and are trying to avoid giving drivers benefits and protections for employment status while placing restrictions on the way they work.

“They make the rules as they go along. They don’t treat me like a freelancer, they don’t treat me like an employee,” said one of the plaintiffs, Taji Gill, a Lyft and Uber driver in Orange County, California.

In 2020, Uber and Lyft are campaigning for drivers and voters to support a California Ballot Scale That would prove independent contractor status to drivers. The companies said such a measure would help drivers by giving them flexibility, and so would Uber He started letting California drivers set their own rates after, after The state passed a law Require companies to treat contract workers as employees. Drivers thought the new flexibility was a sign of what life would be like if voters agreed to hold the ballot, Proposition 22.

Drivers were also given more visibility of where passengers wanted to travel before they had to accept the ride. The ballot procedure was passed before the judge I turned it.

The following year, new driver options were rolled back. Drivers said they lost the ability to set their own prices Now you must meet requirements – such as accepting five out of 10 flights – to see flight details before accepting them.

Drivers now said they lack the benefits of being employees and the benefits of being independent contractors. “I couldn’t see this as fair and reasonable,” said Mr. Gill.

Drivers said not being able to see a passenger’s destination before accepting a ride was particularly stressful. It sometimes leads to unexpected late-night flights to distant airports or far-flung destinations that aren’t cost-effective.

“Millions of people choose to earn on platforms like Uber because of the unique independence and flexibility they provide,” Uber spokesperson Noah Edwardsen said in a statement. “This complaint misunderstands both the facts and applicable law, and we intend to defend ourselves accordingly.”

“California voters overwhelmingly supported a ballot measure that delivers what drivers want and can’t get with traditional jobs: flexibility and independence,” Lyft spokeswoman Jodi Seth said in a statement. “The Lyft platform provides valuable opportunities for drivers in California and across the country to earn wages when and how they want to,” she added.

In the lawsuit, the drivers seek to prevent Uber and Lyft from “pricing shared ride services” and “withhold fare and destination data from drivers when they are offered rides” and ask them to give drivers “transparency per mile,” per minute or per trip “instead of using” algorithms hidden” to determine compensation.

The drivers are suing on antitrust grounds, arguing that if they are classified as independent contractors, Uber and Lyft are interfering in the open market by restricting how they operate and how much they cost passengers.

“Uber and Lyft are either employers responsible to their employees under labor standards laws, or they are bound by laws that prohibit powerful companies from using their market power to set prices and engaging in other behavior that restricts fair competition,” the lawsuit says.

Experts said the complaint would be out of reach in federal court, where judges typically use the “rule of reason” to balance antitrust lawsuits against consumer welfare. Federal courts often allow anticompetitive practices that are arguably beneficial to consumers.

For example, Uber and Lyft might argue that apparent restrictions on competition help reduce customer wait times by ensuring that enough drivers are available. The lawsuit argues that allowing drivers to set their own fares would likely drive prices down for customers, because Uber and Lyft keep a large portion of the fares, what customers usually pay has no relationship On what drivers earn.

Whatever the case, the courts in California could be more sympathetic to at least some of the allegations in the complaint, the experts said.

“If certain laws apply mechanically, that’s in the plaintiff’s best interest in state court and specifically under California law,” said Josh P. Davis, president of Berger Montague’s San Francisco Bay Area office.

You might get a judge saying, ‘This is not a federal law. This is state law. “If you apply it in a straightforward way, cut down on all the complexities of the temporary jobs economy and look at this thing, 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 doubted drivers would get traction with their allegations that Uber and Lyft were illegally setting the prices drivers could charge.

But Mr. Carstensen said the state judge could rule in favor of the plaintiffs on other so-called vertical restrictions, such as incentives that help tie drivers to a platform, for example, a guarantee of at least $1,000 if they complete 70 rides between Monday and Friday. The judge might conclude that these incentives exist largely to reduce competition between Uber and Lyft, he said, because they make drivers less likely to switch platforms and make it more difficult for a new gig platform to hire remote drivers.

“You’re making it very difficult for a third party to get in,” said Mr. Carstensen.

David Seligman, a lawyer for the plaintiffs, said the lawsuit could benefit from increased scrutiny of anticompetitive practices.

“We believe that policy makers, advocates and courts across the country are paying more attention and closely examining the ways in which dominant companies and institutions abuse their power in the labor market,” said Mr. Seligman.

Drivers say backtracking on options such as setting their own prices has made it more difficult to earn a living as a gig factor, especially in recent months as Gas prices soar And as competition between drivers begins to return to pandemic levels.

“It’s getting more and more difficult to make money,” said another plaintiff, Ben Valdez, a driver in Los Angeles. “Enough is enough. There is a lot a person can take away.”