Herrera investigates Uber, Lyft over driver pay and benefits

‘We are going to ensure that these companies pay their drivers what they’ve earned’

SAN FRANCISCO (May 29, 2018) — City Attorney Dennis Herrera today issued subpoenas to Uber and Lyft to turn over records on whether they classify drivers as employees or private contractors, as well as records on driver pay and benefits. The subpoenas follow the California Supreme Court’s recent ruling on the definition of an employee versus an independent contractor.

These subpoenas are the latest component of Herrera’s investigation into whether ride-hailing companies comply with San Francisco ordinances. In light of the California Supreme Court’s decision that companies must affirmatively prove a worker is an “independent contractor” before denying that person the wages and benefits guaranteed to California employees, Herrera seeks proof that Uber and Lyft have lawfully classified drivers as independent contractors or provide their drivers with minimum wage, sick leave, health care contributions, and paid parental leave.
 
“San Francisco’s laws help ensure that employers provide a fair day’s wage for a fair day’s work,” Herrera said. “Our laws also guarantee employees basic humane benefits like sick leave, health care, and paid parental leave. We are not going to turn a blind eye if companies in San Francisco deny workers their pay and benefits. 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. If your company is valued at $62 billion, you can afford to give your workers health care.”
 
Uber and Lyft, whose core business is driving passengers from one place to another, have traditionally designated their drivers as independent contractors.  On April 30, the California Supreme Court ruled that companies must classify their workers as employees, unless the company can prove a specific worker: (a) works outside the company’s control and direction; (b) does work outside the usual course of the company’s business; and (c) has an independent trade, occupation, or business of the same nature as the work she or he does for the company.
 
“The California Supreme Court has spoken on the definition of ‘employee’ in a way that directly affects San Francisco’s worker protection laws, including our Minimum Wage Ordinance and Health Care Security Ordinance,” Herrera said. “We don’t know whether these ride-hailing companies are breaking the law until they provide the information we seek in these subpoenas. We are going to ensure that these companies comply with the Supreme Court’s ruling and with San Francisco’s laws.”
 
The City Attorney’s Office served administrative subpoenas today on Lyft, Inc., Uber, Inc. and Uber’s affiliate, Rasier CA-LLC.  The subpoenas seek:

  • 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; and
  • proof that any driver classified as an independent contractor meets all three criteria set by the California Supreme Court.

“The argument that these companies have tried to use in the past — that they’re just a technology platform — doesn’t pass the smell test,” Herrera said. “People go to Microsoft or Salesforce for software. People go to Uber or Lyft for a ride.”

About the Investigation

Today’s subpoenas are the second set of subpoenas issued by the City Attorney’s Office for Uber and Lyft, which the state designates as transportation network companies, or TNCs. The first set of subpoenas was issued in June 2017 as part of an investigation into discrimination, disability access, public safety and potential violations of other state and local laws. Lyft is providing the subpoenaed information in that ongoing investigation. Uber was directed to do so by the court but has appealed.

About the Supreme Court Case

The California Supreme Court’s landmark decision on independent contractors was issued on April 30, 2018, in Dynamex Operations West, Inc. v. Superior Court of Los Angeles.
 
Additional documentation is available on the City Attorney’s website at: https://www.sfcityattorney.org/category/news/uber-and-lyft/

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