On Tuesday, San Francisco City Hall inched toward a possible new conflict over the legal status of Lyft and Uber drivers in San Francisco, as the City Attorney’s Office announced it has subpoenaed records of drivers from both companies going back to 2015.
According to City Attorney Dennis Herrera, the city seeks the following:
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.
Ride-hailing companies classify drivers as independent contractors, absolving them of many responsibilities under existing labor laws.
But an April 30 ruling by the California Supreme Court spelled out standards in the state for who counts as an employee and who can be called a contractor, possibly providing a platform to challenge Uber and Lyft.
The ruling in Dynamex v Superior Court of LA County concluded, in part:
A worker is properly considered an independent contractor [...] only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
(B) that the worker performs work that is outside the usual course of the hiring entity’s business;
and (C) that 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.
If Herrera reviews the records and decides that Lyft and Uber drivers don’t meet the state standard for contract work, lawsuits over whether or not the companies should have to treat drivers as employees—and thus cede them minimum wage and other benefits, radically altering their business model in the state—will almost certainly follow.
Lyft has not yet responded to requests for comment. Uber declined to comment.
In 2016, Uber faced a driver lawsuit about the question of contractor status, which the company eventually settled for a modest (in this context) sum of $100 million without having to extend any new rights to its workforce.
But for that suit, the standard employed was a murky 11-point rubric from the California Department of Industrial Relations.
The more decisive three-factor system laid out in the California Supreme Court’s April 30 ruling might undermine the companies’ positions, although it’s still too early to speculate what the result of the city audit will be.