Judge to decide on injunction against Uber and Lyft within days
The lawsuit centers on whether Uber and Lyft are violating state law on driver classification. California's labor commissioner is also suing the companies for alleged wage theft.
Uber and Lyft drivers have held several caravan protests against the companies over the last year.
Uber and Lyft have a bit more time before a California judge decides whether they can continue operating as usual in the state. After a three-hour hearing on Thursday, Judge Ethan Schulman said he was going to make a ruling on an injunction against the two companies in a "matter of days."
The injunction stems from a lawsuit brought against Uber and Lyft by California Attorney General Xavier Becerra in May. It was filed in conjunction with the city attorneys from San Francisco, Los Angeles and San Diego. The suit alleges the ride-hailing companies have "exploited hundreds of thousands of California workers" by classifying their drivers as independent contractors rather than employees -- thus violating California state law AB 5.
An injunction would force the companies to reclassify their drivers as employees, something the state says will bring necessary protections to the workers. But Uber and Lyft say the move would cripple their businesses.
The debate over driver rights has raged for years. Uber and Lyft classify their drivers as independent contractors, which means the workers pay for expenses, such as gas, car maintenance and insurance. Drivers also don't have benefits like health care and sick leave. Over the last year, as California and other states have pushed for more benefits and rights for drivers, the move toward reclassifying drivers as employees has come center stage.
During the hearing on Thursday, Judge Schulman heard from Uber and Lyft's attorneys, as well as a representative for the state.
"What we think is dramatic here, is these hundreds of thousands of workers are being systematically denied worker protections," Matthew Goldberg, attorney for California, said. "These are big companies with lots of money."
Uber's lawyer, Theane Evangelis, said that Uber shouldn't necessarily be responsible for the drivers because it's a technology platform not a transportation provider. Lyft's lawyer, Rohit Singla, cited surveys where drivers say they want to remain independent contractors and said an injunction could dramatically effect thousands of people.
Judge Schulman said the decision was difficult without fully knowing what the effect of an injunction would look like. "I feel like I'm being asked to jump into a body of water without knowing how deep it is, how cold it is and what's going to happen when I get in," he said.
This isn't the only lawsuit Uber and Lyft are facing over driver classification in California. On Wednesday, California Labor Commissioner Lilia García-Brower also sued the companies. Her lawsuit alleges that Uber and Lyft are committing wage theft by classifying their drivers as independent contractors, rather than employees.
"This leaves workers without protections such as paid sick leave and reimbursement of drivers' expenses, as well as overtime and minimum wages," she said in a statement.
Drivers rallied in support of California's lawsuits in cities across the state on Thursday. In caravans, they drove by government buildings and Uber and Lyft's driver hubs. The drivers participating in these rallies said they wanted to be classified as employees, so that they could make a living wage and get basic labor rights.
"We are confident that the courts will make the right decision to protect workers," Erica Mighetto, a driver and organizer from San Francisco, said in a statement. "Uber and Lyft have made it clear that, unless anything changes, they will continue to rob workers and drain money from state safety net funds. That's what we are fighting against."