In 2020, Proposition 22 passed in California, making rideshare and other gig workers independent contractors – not employees. Prop 22 was a win for companies like Uber, Lyft and others, but this ruling is not retroactive. This means if you drove in California prior to December 2020, you may be entitled to back pay because you were misclassified. Read on to see what you need to know, and do, to pursue a claim.
Gig companies like Uber, Lyft and Postmates were successful in rewriting California labor law as it relates to gig workers by successfully passing Proposition 22. However, this new law is not retroactive, and the statute of limitations for driver’s claims is 4 years.
If you drove for a gig company over the past 4 years in California and have not already settled your case, you can still pursue your claims.
This post is sponsored by Potter Handy LLP but, as always, opinions are our own, and we only work with products and services that we feel are beneficial to drivers.
- Drivers in California can still sue Uber and Lyft for misclassification, but only for time worked before December 17, 2020
- The process can take a while – former RSG contributor Jay Cradeur is still waiting for his claim to process and pay out
- Interested in pursuing a claim? Fill out this Damages calculator to see what you are owed
Jay’s Experience With Suing Uber and Lyft
Our own Jay Cradeur is in the process of suing Uber and Lyft, and it’s taking some time. Jay realized that he should have been paid over $600,000 more in the four years he’d been driving for Uber and Lyft prior to him switching gears and focusing on his Plan B.
So, he went after Uber and Lyft to get his slice of the back pay pie.
When I first met with Jim, my attorney at Potter Handy, I asked this very question: What can I get out of this? There are several components to what I will call our “back pay.” They are:
- Overtime Premium Pay (Anything over 40 hours in a week, or over 8 hours in a day)
- Non-Productive Time Wages (Period 1 and 2, getting gas, finding a Starbucks bathroom)
- Mileage Expense (Huge!)
- Meal Period and Rest Period Reimbursement
- Unreimbursed Business Expenses (All the things we buy for our business)
That can add up quickly, especially if you have been a full-time driver like I have been.
Drivers’ Claims are Valuable
California law is protective of employees who are misclassified as independent contractors. Under California law misclassified drivers are entitled to:
Rest break: for every day you worked more than 4 hours, you are entitled to a paid rest break. 1 hour penalty
Meal break: For every day you worked more than 6 hours, your employer is required to give you a meal break. 1 hour penalty.
Pay for “unproductive time”. Uber/Lyft only pay for period 3 (when the customer is in your car. They have to pay for period 1 (when you have the app on waiting for a ride request) and period 2 (when you have accepted the ride request but have not yet picked up the customer).
Overtime: Drivers are entitled to time and a half for all time they work over 8 hours/day or over 40 hours/week and double time for over 60 hours/week.
Minimum wage: In no event are employers permitted to pay less than the minimum wage in California or the local municipality, whichever is more.
How much is my hourly wage?
California law is clear that to figure out the workers’ wage rate, you only look at the time they are paid for. Uber/Lyft, etc only pay for period 3. So you take what you got paid and divide it by the time you were in period 3 for that pay period which equals your hourly rate.
This is the rate that is used to determine the amount of your penalties and the rate you should be paid for your “unproductive time” (periods 1 and 2).
Drivers’ claims for all the damages above are solid because their misclassification claims are subject to the “ABC” test. The company has the burden to show they meet A, B and C and they can’t get past “B”.
To get past B the company has the burden to show “the worker performs work that is outside the usual course of the hiring entity’s business”. If Uber had a leaky pipe at their office, they can get past the B test when they hire a plumber to fix it because Uber isn’t in the business of construction or pipe repair.
There is no way Uber can say drivers using the Uber Driver App are working “outside (Uber’s) usual course of business”. As one judge said, their arguments are laughable.
Mileage and other expense reimbursements
Drivers may also be entitled to $.58 for every mile driven for the gig companies. I say “may” because the law is not clear on if the clear cut “ABC test” or the less certain previous “10 factor” test that preceded the ABC test. Until the California Supreme Court rules on this issue, we have to litigate which test applies for reimbursed expenses. The ABC test should apply and, if not, drivers should win under the 10 factor test, but these damages are not as certain as the ones above.
How much are you owed?
It is just a matter of getting your miles and minutes for periods 1, 2 and 3 then doing the math to determine what you are entitled to under California law.
How long will it take?
Drivers are entitled to a lot of money and these companies won’t hand it over without a fight. These companies will not pay a fair value unless they have to, and they don’t have to unless you have an attorney who will force the issue by taking your case all the way to a verdict. The companies will obstruct and delay in every way they can. The cases have to be individually arbitrated. Cases are being scheduled for trial (arbitration) about 15 months out.
Jay’s Claims Process
In order to determine how much Jay was owed, he used a damages calculator offered by Potter Handy. Here is the damages calculator you can use to get an estimate.
By using this calculator, Jay realized he was owed more than $600,000 in back pay from Uber and Lyft. This number is different for every driver and is based on when you drove, how often you drove, and where you drove.
Just because he’s owed $600,000, however, doesn’t mean Jay expects that high of a payout once he’s finished going through the system. He realistically expects closer to $180,000 after taking negotiations into account and his legal fees.
It’s a long and arduous process, so Jay is still in the thick of things at the moment and hasn’t seen his payout, but the process is moving and we’ll keep you posted as he gets updates.
Can Drivers Still Sue Uber & Lyft? Yes – But They’ll Have to Do it Soon
As mentioned above, Jay Cradeur has gone through—and is still going through—the process of suing Uber and Lyft. He used the services of Mark Potter, of Potter Handy LLP to help guide him through the process and represent him. After Jay’s positive review of the service, we ended up partnering with Potter Handy to help other drivers open their own arbitration cases.
Mark Potter provided us some insights into what this process looks like as well as options drivers currently still have for pursuing legal action against Uber and Lyft. However, options are beginning to dwindle, so drivers who want to take action should do so sooner rather than later.
Potter said, “Drivers can still pursue claims that accrued prior to December 16, 2020 and up to 4 years from the date we file.”
This means that prior to the implementation of Prop 22, the law was on the side of drivers.
“Prior to Prop 22, the gig companies had to pass A, B and C of the ‘ABC Test’ to legally classify their drivers as independent contractors for purposes of claims brought under Wage Orders. They can’t get past B, which says, ‘The worker performs work that is outside the usual course of the hiring entity’s business.’
“One Judge referred to Uber’s argument that drivers on Uber’s platform were performing work that is outside Uber’s usual course of Uber’s business as ‘laughable.’ It is laughable. Recently the California Supreme Court held that the ABC Test applies retroactively. This means if you drove any time before December 16, 2020, you were misclassified.”
Since it is deemed drivers were misclassified, they are owed back pay for the time period they drove for Uber and Lyft prior to Prop 22 passing.
What Options Do Drivers Have?
There are a few options for drivers depending on how they signed up for the platforms and if they signed the arbitration clause or not.
Potter said the majority of these misclassification cases are decided in arbitration and not in the public court system. “While it takes significantly longer to get the litigation process initiated and moving in arbitration, the procedures are more streamlined. Once a driver is awarded back pay and reimbursements, companies like Uber and Lyft will be unable to delay results by appealing a judgment,” said Potter.
He continued: “Drivers are able to seek damages for 4 years from the date they file a formal claim. If you were driving at the start of 2017, you have claims expiring every day. You shouldn’t wait another day to pursue your claims.”
There are also class action lawsuits you can consider joining. Keep in mind, if you join a class action lawsuit, you cannot sue Uber or Lyft again for the same issue. Here are some recent lawsuits we have looked into that are either paying out or gearing up to move along in the system:
Previous Settlements: O’Connor vs Uber and Yucesoy vs Uber
These two class-action lawsuits are for drivers in California and Massachusetts who used the app as drivers between August 16, 2009 and February 28, 2019. It was only available to drivers who were not bound by Uber’s arbitration clause.
Both lawsuits have reached a settlement and as part of that, Uber has agreed to pay $20,000,000 and will change certain policies that affect drivers as part of the settlement agreement. It does not reclassify drivers as employees and the amount each driver will receive is based on miles driven while using the Uber app with a passenger on board.
As drivers, it’s up to you to take action or let it slide. The worst that can happen is you don’t receive a payout.
Bear in mind, you can’t make a new claim in California unless it’s retroactive to when Prop 22 was put into place.
The way to start is simply filling out the damages calculator on Potter Handy’s website. This will get your information to Potter Handy.
Second, an attorney will call you to review your case.
Third, you will receive a DocuSign attorney retainer agreement. This is where you agree to no upfront costs on your part, and Potter Handy will earn either 33% or 40% of the settlement amount depending on whether you go to arbitration or not.
Fourth, you will provide Potter Handy with documents to support your case, such as your Uber and Lyft end of year summaries (available on the Uber and Lyft website) showing how many hours you logged online.
Fifth, Potter Handy takes legal action on your behalf, and you wait until Uber and or Lyft respond.
Sixth, you agree to a final settlement amount and get paid, less your legal fees.
It’s a long process, but if you have patience and think your payout would be worth the wait, then now’s the time to act.
Drivers, have you taken part in any class action suits or pursued individual claims against Uber and Lyft? Have you received any payouts?
-Paula @ RSG