“We believe it’s time for all workers to be treated fairly,” said Becerra in an online press conference. “We believe innovation doesn’t require you mistreat workers.”
He said the suit is being filed in response to Assembly Bill 5, which requires most independent contractors to become shift employees under California labor laws.
Becerra was joined by the city attorneys of Los Angeles, San Francisco and San Diego.
The lawsuit would seek restitution for hundreds of thousands of drivers, with penalties of $2,500 per driver. The total could potentially reach several hundred million dollars or more.
“Uber and Lyft are thumbing their noses at the California Legislature,” said San Diego City Atty. Mara Elliott. “Uber and Lyft are billion-dollar companies that aren’t following the rules.”
Los Angeles City Atty. Mike Feuer said the drivers are essential workers during the pandemic, yet are “exposing themselves to danger every day” without employment protections.
The rideshare companies have committed to spending over $90 million on a ballot measure in November to overturn Assembly Bill 5.
Lyft, which like Uber is headquartered in San Francisco, released a conciliatory statement after the press conference.
“We are looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever,” the company said.
Uber, however, said it is prepared to contest the claim in court.
“At a time when California’s economy is in crisis with 4 million people out of work, we need to make it easier, not harder, for people to quickly start earning,” Uber said in a statement. “We will contest this action in court, while at the same time pushing to raise the standard of independent work for drivers in California, including with guaranteed minimum earnings and new benefits.”
The U.S. Chamber of Commerce accused California of attempting to drive two successful companies out of the state.
“As America looks to get back to work, California’s officials serve up an injunction instead of incentives. The litigation filed by the Attorney General and City Attorneys is nothing short of an effort to drive successful businesses out of the state and deny opportunities to millions of workers,” said Neil Bradley, executive vice president and chief policy officer of the chamber.
Elliott’s office had previously filed suit against grocery delivery company Instacart, with similar allegations of misclassification.