San Francisco's City Attorney, Dennis Herrera, has officially subpoenaed both Uber and Lyft to determine whether or not drivers for the two ride-hailing platforms qualify as independent contractors or employees. The underlying goal is to determine whether the companies are following San Francisco ordinances pertaining to worker protection, wages, and benefits and follows a recent ruling by the California Supreme Court. Namely, the court ruled that a company needs to "affirmatively prove" that its workers are independent contractors before being able to deny them those. Following that ruling, Herra has set out to ensure that both companies are, in this case, operating lawfully since drivers seem to be internally classified and treated as independent contractors. To that end, Herra has requested that Uber and Lyft provide several pieces of documentation, including a full list of drivers who have begun or ended a "ride" within San Francisco between 2015 through the date of the subpoena.
Moreover, the companies also need to show how they classify workers and provide documentation of hours, wages, benefits, and healthcare payments. Finally, Uber and Lyft have been asked to supply the attorney with proof that all drivers classified as independent contractors meet the criteria set by the California Supreme Court. Specifically, as of April 30, companies in the state must be able to prove that a worker works outside of the company's "control and direction." Meanwhile, the worker must also be shown to perform work outside of "the usual course" of the company's business. Last but not least, that worker needs to have an "independent trade, occupation, or business" of the "same nature" of work that is being performed for both startups. Whether or not either Uber or Lyft could classify all of its drivers as independent contractors under those rules remains to be seen but Herra seems determined to find out.
In the meantime, Uber has declined to comment on the subpoena, according to several sources. For its part, Lyft has stated that it is more than willing to work with Herra to ensure he understands the business model it follows. The company has also claimed that its drivers make between $21 and $22 per hour, after expenses, on average. Aside from requirements for benefits provided to employees, that level of wages – if true – would place Lyft within operating limitations under state law. However, it's not always clear whether wages of workers in these kinds of positions are stable enough to meet requirements. Furthermore, there is likely a split between which workers can be classified as either an employee or independent contractor. So both companies still likely have a long way to go in terms of assuring the state that the law is being followed to the letter.