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Uber Technologies (NYSE:UBER) and Lyft (NASDAQ:LYFT) will go to court on Monday as part of a lawsuit filed by Massachusetts’ attorney general. The lawsuit alleges that the ride-sharing companies misclassified their drivers as independent contractors rather than employees.
Massachusetts Attorney General Andrea Joy Campbell wants the presiding judge to conclude that drivers for Uber (UBER) and Lyft (LYFT) are employees under state law and should have benefits such as a minimum wage, overtime pay, and earned sick time. The contention is that by not classifying their Massachusetts drivers as employees, Uber (UBER) and Lyft (LYFT) avoided paying $266.4 million into workers’ compensation, unemployment insurance, and paid family medical leave over the last ten years.
Amid growing pushes across the U.S. to reclassify rideshare workers, Uber (UBER) and Lyft (LYFT) have maintained that they have properly classified their drivers because they should be considered technology companies whose apps facilitate connections between drivers and potential riders, not transportation companies.
“If the Attorney General wins this case, it will mean millions of Massachusetts riders would either see major reductions in service and a significant increase in costs, or lose ridesharing completely. All for something that the vast majority of drivers don’t even want,” stated Uber (UBER) attorney Theane Evangelis. The trial in Suffolk Superior Court is expected to last up to a one month. Several current or former drivers for Uber (UBER) and Lyft (LYFT) are anticipated to testify. The result of the trial could also have implications for DoorDash (DASH) and Instacart (CART).
