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Trial begins on employment status of Uber and Lyft drivers

A pivotal trial to determine whether Uber and Lyft misclassified their drivers as independent contractors instead of employees has begun in Massachusetts.

The outcome of this trial could have significant implications for workers, businesses, and the ride-hailing industry as a whole.

The Attorney General’s Office argues that Uber and Lyft fail to meet the state’s “ABC test” criteria for classifying workers as independent contractors. The companies, however, maintain that their business models are too novel to be defined as traditional employment, and that drivers prefer the flexibility of being independent contractors.

The trial is expected to last several weeks, with testimony from dozens of witnesses, including current and former drivers, academic experts, and executives from both companies.

Ballot measures and legal challenges

The case has been pending for nearly four years, during which time much has changed in the gig economy landscape. Uber and Lyft have faced similar legal challenges in other states, with varying outcomes. In New Jersey, Uber settled a case related to driver misclassification in 2022. One year later, Uber and Lyft together paid $328 million to settle a wage theft case in New York.

In California, the companies successfully campaigned for a ballot measure that allowed them to classify drivers as independent contractors. And in Massachusetts, Uber, Lyft, DoorDash and Instacart are pursuing a ballot question that would establish a law declaring their drivers to be independent contractors, not employees, potentially while outlining some new benefits as well.

Potential outcomes

The trial’s outcome could significantly impact the ongoing legal environment surrounding the employment status of gig workers and the future of ride-hailing services.

HR professionals should monitor this case, as it may set a precedent for how courts will interpret worker classification in the gig economy and could influence future legislation and company policies regarding benefits, protections and flexibility for workers.