Uber and Lyft May Misclassify Drivers to Avoid Employee Benefits

Shub Johns & Holbrook LLP launch an investigation into Uber and Lyft after an increasing number of complaints indicate that the company may be wrongfully misclassifying their drivers as independent contractors instead of employees, seemingly avoiding the need to provide traditional employee benefits to drivers.

These companies indicate that their drivers ARE independent contractors because they have flexible work hours. Despite this claim, Uber and Lyft drivers feel like their respective companies have significant control over the rideshare work environment; Both Lyft and Uber set the rideshare fares, have strict guidelines for its drivers to follow, and subject their drivers to a rating system that can impact their ability to seek rides. Independent contractors tend to have more freedoms in what they charge, and set up their own practice methods, so many Uber and Lyft drivers may feel like they are not being treated or classified as they should under Uber.

Misclassification of employees can have serious consequences for the business, as it may not be in compliance with the Fair Labor Standards Act (FLSA) and the Department of Labor.

Individuals classified as employees are can expect regular, consistent wages and work hours, but are also entitled to certain benefits like healthcare, workers’ compensation for injuries, and other benefits that often are not offered to independent contractors or self-employed individuals. Misclassifying employees can be money saver for companies by avoiding minimum wage restrictions or needing to offer healthcare benefits or even skirting around employment discrimination requirements.

If you are a driver with Uber or Lyft and feel that you are being misclassified as an independent contractor instead of an employee, let us know!