Massachusetts Lawyer Normal Maura Healey introduced Tuesday that she would file a lawsuit in opposition to Uber and Lyft, alleging that firms have incorrectly labeled their drivers as contractors relatively than workers to save lots of tens of millions of dollars in compensation.
"We’re suing as a result of these firms have constructed their multi-billion greenback enterprise that misclassifies their drivers as contractors," he mentioned throughout a morning information convention held at Zoom.
The criticism, searching for a declaratory judgment, was filed with the Massachusetts Superior Court docket in Suffolk County.
Healey mentioned these firms don’t pay unemployment advantages or employees compensation, which helps them save tens of millions of dollars yearly.
"Taxpayers and different firms are basically paying when Uber and Lyft misclassify employees," he mentioned. "The underside line is that Uber and Lyft have had a free journey for much too lengthy."
Massachusetts is now the second state, after California, to hunt a courtroom ruling that finds Uber and Lyft have violated state labor legal guidelines. In California, a legislation referred to as AB5 that went into impact earlier this yr says that drivers of those firms and different related employees are workers relatively than unbiased contractors. Massachusetts has had such a legislation since 2004.
"It’s a nice impetus that the Massachusetts legal professional common helps what now we have been saying for years," mentioned Shannon Liss-Riordan, a Boston-based legal professional who has led quite a few lawsuits in each states in opposition to the 2 ride-sharing firms.
"This has to go throughout the nation, and I'm having conversations with members of Congress," he mentioned.
Uber didn’t instantly reply to a request for remark from NBC Information.
CJ Macklin, a Lyft spokesperson, declined to reply particular questions, however despatched an electronic mail assertion alleging that the lawsuit "would eradicate the job for greater than 50,000 folks."
"Drivers don't need this: Most drive only a few hours every week, and have chosen to drive utilizing Lyft exactly due to the independence it offers them to earn cash of their spare time," he wrote. Each firms have vigorously resisted California legislation and have even spearheaded an effort to go a brand new state legislation to be offered to voters in November that might successfully nullify AB5 for live performance employees.
Each Lyft and Uber have mentioned that if they’re pressured to reclassify live performance employees as workers, it might essentially alter their enterprise mannequin and have an antagonistic impact on their profitability, based on their newest annual studies submitted to the Securities and Alternate Fee at February and March. respectively.