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Uber and Lyft Face Anticompetitive Claims in Lawsuit Over Driver Independence

Uber and Lyft drivers are accusing the ride-hailing giants of engaging in anticompetitive practices, alleging that the companies manipulate customer prices and restrict drivers' freedom to accept rides without consequences. In a state lawsuit supported by the advocacy group Rideshare Drivers United, the drivers challenge the classification of gig economy workers and claim that despite being treated as independent contractors, they lack true independence.


Uber and Lyft have long argued for their drivers' classification as independent contractors, emphasizing the flexibility it offers, allowing drivers to set their own hours. However, the lawsuit, filed in San Francisco Superior Court, contends that the companies are attempting to evade providing employment benefits while imposing constraints on drivers' autonomy.


The complaint asserts that the companies altered options for drivers in 2020, rolling back features that allowed drivers to set their own fares and providing increased visibility into passenger destinations before accepting a ride. These changes were reversed the following year, leading drivers to feel deprived of both the benefits of employment and the independence of being an independent contractor.


One of the plaintiffs, Taje Gill, a Lyft and Uber driver in Orange County, California, expressed frustration, stating, "They're making up the rules as they go along. They're not treating me as independent, they're not treating me as an employee."


The inability to view a passenger's destination before accepting a ride is highlighted as a significant challenge, leading to unexpected, unprofitable trips for drivers. The drivers are now seeking legal action to bar Uber and Lyft from fixing ride-share prices, withholding fare and destination data, and require transparent pay structures.


Uber and Lyft responded to the lawsuit, with Uber spokesman Noah Edwardsen stating that the complaint misinterprets facts and the applicable law, and Lyft spokeswoman Jodi Seth emphasizing that voters in California overwhelmingly supported a ballot measure for driver flexibility and independence.


The drivers are suing on antitrust grounds, arguing that by classifying them as independent contractors, Uber and Lyft interfere with an open market, restricting fair competition in how they work and what passengers are charged. Legal experts suggest that while the federal court might view the complaint as a long shot, state courts in California could be more receptive to certain claims.

David Seligman, a lawyer for the plaintiffs, believes the lawsuit benefits from increasing scrutiny of anticompetitive practices, stating, "We think that policymakers and advocates and courts across the country are paying more attention and more closely scrutinizing the ways in which dominant companies and corporations are abusing their power in the labor market."


The drivers contend that the changes in options, such as setting their own prices, have made it increasingly challenging to earn a living as gig workers, particularly amid rising gas prices and heightened competition among drivers. One plaintiff, Ben Valdez, a driver in Los Angeles, emphasized, "Enough is enough. There's only so much a person can take."

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