Uber Technologies Inc (NYSE: UBER) and Lyft Inc (NASDAQ: LYFT) drivers have accused the ride-hailing firms of unfairly controlling the amount they can charge passengers for rides in an antitrust suit in a state court of California.
Uber and Lyft are facing an antitrust lawsuit
Antitrust statutes and rules against unfair commercial practices were allegedly broken in the suit in San Francisco Superior Court, which was pursuing class-action status. The drivers argued that they would receive “the most competitive compensation” if they could offer customers lower prices.
According to the case, by forbidding drivers from charging riders, Uber and Lyft damage competitiveness in the labor force and the consumer market. This is because drivers make less money while consumers pay more.
An Uber representative said the “complaint misconstrues both the facts and the applicable law, and we intend to defend ourselves accordingly.”
The companies categorize drives as independent contractors and not employees, which has been at the center of most legal challenges witnessed in recent years in federal and state courts across the country. In addition, Uber and Lyft each contributed millions of dollars to fund Proposition 22, a ballot campaign that would have exempted app-based businesses from generally relevant employment regulations, in 2020.
Uber and Lyft don’t pay employee benefits to drivers
Lyft and Uber have avoided paying a wide range of perks for employees and taxes to the state, including jobless insurance rates, minimum wage, and payroll tax, by banking on their argument that their workers are independent contractors.
In a recent case, the complainant drivers claim that by dictating the fares that drivers should charge, Lyft and Uber “deprive those drivers of economic independence.”
The Edelson plaintiffs’ company and Denver-based Towards Justice are the attorneys for the drivers. According to Rachel Dempsey of Towards Justice, Uber and Lyft have been attempting to want it both ways for over ten years. The argument that drivers are contract employees is at odds with how they attempt to sidestep the obligations of being an employer and keep control over the transactions.
