Uber and Lyft drivers Tuesday initiated a class-action lawsuit alleging that the two companies engaged in price fixing which “increase[d] customer prices even while suppressing driver pay.”
The complaint alleges that vertical price fixing under California’s Cartwright Act is illegal per se and harmful to both drivers and riders. The plaintiffs asserted that if they are truly independent contractors as drivers, then drivers should dictate the price their customer is charged. However, Uber and Lyft’s hidden algorithms, which are “not disclosed to drivers or riders,” determine the rider’s cost and the driver’s pay. Additionally, the rideshare companies only compensate drivers when they have a passenger in their vehicle.
The purpose of this class action lawsuit is to for drivers to prohibit Uber and Lyft “from fixing prices for rideshare services… based on hidden algorithms rather than transparent per-mile, per-minute, or per-trip pay.” The drivers also seek treble damages to remedy their “compressed compensation[.]”
In 2020, California Proposition 22, the App-Based Drivers as Contractors and Labor Policies Initiative (2020), passed. The proposition sought”to define app-based transportation (rideshare) and delivery drivers as independent contractors and adopt labor and wage policies specific to app-based drivers and companies.” However, a California court found that Proposition 22 was “unconstitutional and unenforceable.”