The two ride-hailing companies are facing lawsuits from their partner drivers for putting the kibosh on their services without giving sufficient notice. The lawsuit is being brought under the 1988 Worker Adjustment and Retraining Notification (WARN) Act, which ensures that laid-off workers get time to adjust.
The act says, unless a company is going through "unforeseeable business circumstances," they are liable for wages and benefits that their workers would have earned during the 60-day notice period.
The move comes after the city residents voted in favor of a measure that required them to fingerprint the drivers, Reuters reported.
By law, companies were required to warn their employees at least 60 days in advance before a mass layoff. That, however, did not happen, as they suspended their services to be in compliance with the new city law, which required them to run fingerprint-based background checks on all their drivers. According to Reuters, Uber and Lyft collectively laid off 10,000 drivers at that time.
In their argument, Lyft and Uber say that their drivers are contractors and not full-time employees. However, certain provisions under state and federal law count them as employees because of the degree of control the two companies have over them.
And even though, for the most part, the two companies remain in denial about the status of their drivers, they are finally beginning to come to terms with reality.
Uber, for example, settled a class-action lawsuit for $100 million in fines for 350,000 drivers in Massachusetts and California who protested for reimbursements, overtime pay, etc. Similarly, Lyft has proposed a $27 million settlement for a lawsuit filed by its drivers in California.