Uber and Lyft are set to face trial on Monday in a US lawsuit by Massachusetts’ legal professional basic alleging the ride-share corporations misclassified their drivers as impartial contractors fairly than extra expensive staff.
The non-jury trial in Boston comes amid broader authorized and political battles within the Democratic-led state and elsewhere nationally over the standing of drivers for app-based corporations whose rise has fueled the US gig employee economic system.
Massachusetts Lawyer Normal Andrea Pleasure Campbell is asking a decide to conclude that drivers for Uber and Lyft are staff beneath state regulation and due to this fact entitled to advantages such at the least wage, time beyond regulation and earned sick time.
Her workplace claims the businesses for years misclassified hundreds of Massachusetts drivers and can’t meet a three-part take a look at beneath the state’s worker-friendly legal guidelines that may enable them to be deemed impartial contractors.
Research have proven that utilizing contractors can value corporations as much as 30% less than utilizing staff.
Uber (UBER) and Lyft (LYFT) argue that they correctly categorised the drivers, saying they don’t seem to be transportation corporations that make use of drivers however know-how corporations whose apps facilitate connections between drivers and potential riders.
The businesses warn that, ought to Suffolk County Superior Courtroom Choose Peter Krupp rule towards them, they’d be unable to keep up their versatile enterprise mannequin within the state and could also be compelled to chop or stop operations in Massachusetts.
Rohit Singla, a lawyer for Lyft, throughout a Thursday pre-trial listening to stated his shopper’s “present enterprise can not assist drivers as staff, shouldn’t be arrange for that and wouldn’t work that approach.”
The case goes to trial every week after Massachusetts’ highest court docket heard arguments over whether or not to permit an industry-backed poll measure to go earlier than voters in November that defines the drivers as contractors however entitles them to some new advantages.
The court docket appeared open to permitting some model of that proposal to go on the poll together with a rival, labor-backed poll measure that seeks to permit the drivers to unionize.
The lawsuit going to trial was filed in 2020 by Campbell’s predecessor, Maura Healey, now the state’s Democratic governor. Ought to the state prevail, it has stated the businesses might face massive penalties for not correctly classifying their drivers.
By not classifying their Massachusetts drivers as staff, Uber and Lyft averted paying $266.4 million into employees’ compensation, unemployment insurance coverage and paid household medical depart over 10 years, in line with a report by the state auditor.