Hot start-ups Uber and Lyft have contributed substantially to the growth of the sharing economy that connects freelancers with available work projects. Now some drivers of those companies argue they've been misclassified as independent contractors and want full employee status.
Uber and Lyft face two separate lawsuits in San Francisco federal court. The suits, filed in 2013, are seeking class-action status and now making their way through the courts.
A ruling on full employee status for Uber and Lyft drivers could have wide-ranging implications for the collaborative consumption movement. The new economic model has been able to maximize start-ups' growth through a largely freelance workforce with few traditional, full-time benefits and lower costs for new businesses.
Beyond full employee status, the plaintiffs are seeking reimbursement for expenses including gasoline and car maintenance costs, which they would normally receive if they had employee standing in California. Drivers for both companies currently are classified as freelancers, and drivers cover such costs themselves.
Plaintiff attorney Shannon Liss-Riordan, partner at Boston-based Lichten & Liss-Riordan, said both companies are profiting "massively" from what she describes as a worker misclassification.
"Companies like to convince their workers that it's good for them to be independent contractors because they have all of this flexibility," said Liss-Riordan, who is representing both Uber and Lyft drivers. "That's a lie because employees can also have flexibility, work part-time hours and pick their schedules. You can get all of those things and still get employee benefits."
But didn't the Uber and Lyft drivers know they were signing up for freelance jobs—without benefits—from the get go?
Liss-Riordan argues the complaints basically come down to fairness for drivers. "There are basic labor protections in place to ensure companies do not take advantage of their workers," she said. "Why should Uber, valued at $40 billion, not have to pay for things that we as a society have deemed important?"