California sues Uber, Lyft

SAN FRANCISCO: California has filed lawsuits against Uber and Lyft for alleged wage theft by misclassifying their drivers as independent contractors rather than employees, the Labour Commissioner’s Office said late on Wednesday. Classifying their drivers as independent contractors "has deprived these workers of a host of legal protections in violation of California labour law," the office said in a statement.

Under a California law that came into effect on January 1, workers are considered employees unless they are free from the company’s control and perform work outside its usual line of business.

The law challenges the business model of the San Francisco-based rideshare platforms and others which depend on workers taking on "gigs" as independent contractors. California’s lawsuits seek to recover amounts owed to all Uber and Lyft drivers, including nearly 5,000 drivers who have filed claims for owed wages, the Labour Commissioner’s Office said.

"The Uber and Lyft business model rests on the misclassification of drivers as independent contractors," California labor commissioner Lilia García-Brower said.