California in settlement talks with Uber, Lyft over wage theft claims
In early 2020, thousands of drivers — led by Southern California advocacy group Rideshare Drivers United — filed claims with the state against Uber and Lyft. They alleged the companies had illegally treated them as independent contractors and owed them more than $1.3 billion in wages, expenses and damages.
Now, the state is set to begin settlement negotiations with the ride-hailing giants. And drivers want the California attorney general and the labor commissioner to take their demands into account during the closed-door talks.
People who actively drove for Uber and Lyft between 2016 and 2020 could be eligible for the potential settlement, which probably involves more than 250,000 drivers, according to Rideshare Drivers United.
To press their demands, drivers plan to rally Wednesday morning outside Los Angeles City Hall, as well as in San Diego and San Francisco, asking that the state push for a settlement agreement that recoups all lost wages and damages, or establishes additional pay boosts and workplace protections for drivers.
'Our first priority is to get back the money that was stolen,' said Nicole Moore, president of Rideshare Drivers United, referring to wage theft claims. 'The only way they should trade away any of that money is to get fair standards.'
Moore said a settlement could help establish a rate card where drivers are paid a minimum of $1.75 per mile and 60 cents per minute — a model similar to that adopted in New York City.
The planned protest comes ahead of a mediation session scheduled for Monday with Uber. A session with Lyft is scheduled for April 8.
The companies did not immediately respond to a request for comment.
The negotiations involve not only the California labor commissioner, with whom drivers had filed their wage claims, but also the state attorney general. Joined by the city attorneys of Los Angeles, San Diego and San Francisco, they sued Uber and Lyft to force the companies to immediately classify drivers as employees and accused the companies of dodging local and state payroll taxes.
Drivers who were misclassified as independent contractors during the target period were denied overtime, meal and rest breaks and mileage reimbursement, the lawsuits said.
These claims, as well as several other private lawsuits, were combined into a coordinated action in San Francisco Superior Court so that a single judge could decide all the issues in one place.
Uber and Lyft accused California authorities of wasting time and resources on wage claims, contending that the majority of California drivers wanted to work as independent contractors rather than employees, and that the state's enforcement efforts would stifle the growth of the industry.
The coordinated lawsuit was paused while Uber and Lyft launched an ultimately unsuccessful attempt to block the state from enforcing wage and hour laws, arguing that their arbitration agreements with individual drivers prevented the state from doing so.
In November 2020, voters approved Proposition 22, the ballot initiative backed by Uber, Lyft, DoorDash and other gig economy companies. The measure exempted the companies from a provision in state labor law, allowing them to classify drivers for their ride-hailing and delivery services as independent contractors rather than as employees.
The ballot initiative was upheld by the state Supreme Court last year.
Uber and Lyft drivers say their work conditions and pay have declined in recent years.
Lyft driver Yasha Timenovich, 48, who began driving in 2014, said he works 12 hours a day, seven days a week, and yet still struggles to make ends meet.
The Hollywood resident said that while ride-hailing and delivery companies are raising prices for customers, drivers get an increasingly small share due to 'nonsensical' and 'inconsistent' fees.
Earlier this week, for a ride where the passenger paid $54.99, Timenovich earned just $24.15, after the company deducted $29.34 for 'commercial auto insurance & other expenses,' $0.10 for 'taxes & gov't fees,' and $1.40 for Lyft's earnings, according to a screenshot of the app reviewed by The Times.
'How do they justify this?' he said. 'What's left for me?'
Karen Vandenberg, 64, a San Diego-based Uber driver, said that previously she might have been able to make $250 in a day before subtracting gas and other expenses. But to make that much today, she might have to work for several days. Car problems forced her off the road for several months, when she had to replace her car's transmission twice in 2023, costing her a total of roughly $10,000.
'It was a long time that my car was out,' Vandenberg said. 'I didn't have money to pay for another transmission, so it sat there. It just got frustrating — not only that, but the constant oil changes and brake changes and tire changes and gas.'
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