Uber and Lyft drivers sue for New York unemployment benefits

Uber and Lyft drivers sue for New York unemployment benefits

5 -min read
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5 -min read
Listen to this article

[NEW YORK] Doh Ouattara drove for Uber and Lyft from 2016 until mid-March of this year, when he became concerned about the pandemic. With three children under six to provide for, he decided to apply for unemployment benefits.

But despite hundreds of calls to the New York State Department of Labor and two prominent rulings that deemed gig workers like him to be employees eligible for the state's unemployment insurance, he has yet to receive any payment, and time is running short.

Mr Ouattara, who was trained as an accountant in the Ivory Coast before moving to the US, could afford to pay only half his rent in April and none of it this month.

"My savings are almost gone — I've used them for food, basic necessities," he said. "It is getting very, very stressful."

On Monday, Mr Ouattara and three other Uber and Lyft drivers, along with an advocacy group called the New York Taxi Workers Alliance, filed a complaint in federal court against Governor Andrew Cuomo and the state's Department of Labor, saying drivers were not paid standard benefits to which they were entitled in a timely way.

The action comes at a time when drivers have been increasingly vocal in demanding the protections afforded to employees, which states like New York and California have granted them to varying degrees, even as the companies continue to maintain that drivers are contractors.

The lawsuit says drivers must wait months to receive standard unemployment benefits, if they receive them at all, compared with the two to three weeks that the state has said is typical for other workers. The plaintiffs are seeking an injunction requiring the state to immediately pay their benefits and the benefits of other drivers to whom they are owed.

"The issue of Uber driver employment status has been settled for over a year by the state's own decision," said Zubin Soleimany, a lawyer for the taxi workers group. "But it hasn't been able to provide people benefits when they need them. It's been a catastrophe for these guys."

Jack Sterne, a spokesperson for the Cuomo administration, said: "During this pandemic emergency, we have been moving heaven and earth to get every single unemployed New Yorker their benefits as quickly as possible, including Uber and Lyft drivers, who are treated no different than any other worker."

According to the lawsuit, a key problem is that the state has not forced companies like Uber and Lyft to provide the data on workers' earnings that employers must typically supply. Lacking such data, the suit says, the state has required drivers to complete a lengthy application process that involves more steps and paperwork than other workers face to receive standard unemployment benefits.

Josh Gold, an Uber spokesperson, said the company had provided the state with the earnings data it had requested, though he declined to elaborate on whether the data would be sufficient to calculate unemployment benefits promptly. The company said in April that it had agreed to comply with a state request for earnings data, but that it had not yet done so.

Lyft said the company was working with the state to provide access to earnings data.

"The special interests behind this lawsuit aren't interested in what's best for drivers, since filing this lawsuit will do nothing to help them get assistance quickly," said Julie Wood, a Lyft spokesperson.

Uber and Lyft have encouraged drivers to apply for benefits under the Pandemic Unemployment Assistance programme, which Congress passed in March to replace income for out-of-work contractors and other workers who might fall through the gaps in the safety net.

Under federal rules, only those ineligible for traditional unemployment benefits are supposed to receive pandemic assistance. But even though New York and California consider many drivers to be employees eligible for traditional benefits, the states are helping drivers obtain the pandemic assistance, arguing that it is often the fastest way for them to receive financial support.

New York state introduced a single benefits application on April 20 that routes workers into traditional unemployment benefits or pandemic assistance, depending on which programme the state considers them eligible for.

Lyft said that pandemic assistance was a better deal for many part-time drivers, because the minimum payment under that programme was higher than the minimum unemployment benefit.

But for full-time drivers, pandemic assistance can be a weak substitute for traditional unemployment benefits. The complaint calculates that Mr Ouattara's benefit under the pandemic assistance programme would be less than US$250 a week, compared with US$504 that he would receive in unemployment benefits. (He and other drivers would receive a US$600 a week federal supplement on top of either programme through the end of July.)

The difference arises because pandemic assistance is based on income net of expenses like gas and maintenance, whereas unemployment benefits are based on gross earnings — or about US$26,000 versus about US$55,500 for Mr Ouattara in 2019. Other drivers face similar disparities, according to the complaint.


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