Uber driver Edward Nkansnh onCalifornia street in San Francisco on April 3, 2020. (Photo: JasonDoiy/ALM)

California's attorney general and the city attorneys of LosAngeles, San Diego and San Francisco have alleged that UberTechnologies Inc. and Lyft Inc. have violated California law by classifying driversas independent contractors.

In a lawsuit filed on May 5 in the San FranciscoSuperior Court, the state and city lawyers assert that theride-hailing companies have exploited hundreds of thousands ofCalifornia workers.

Related: California's AB5 & gig work: Whatnow?

At a press conference announcing the lawsuit, Attorney GeneralXavier Becerra, San Francisco City Attorney Dennis Herrera, LosAngeles City Attorney Michael Feuer, and San Diego City AttorneyMara Elliott said that companies are avoiding millions of dollarsin payroll taxes and skirting their responsibility to providebenefits like health care, a minimum wage and reimbursement forexpenses for ride-hail drivers.

"California taxpayers end up having to carry the load that Uberand Lyft don't want to accept," Becerra said.

In a potential ominous note for other gig economy companies, Herrera said thegovernment lawyers will be "keeping our finger on the pulse to makesure that gig economy companies are working in accordance with thelaw."

Herrera pointed to a suit previously filed by Elliott againstInstacart where San Diego Superior Judge TimothyTaylor found in February that California lawrequired the grocery delivery company to classify its "shoppers" asemployees. Herrera said the Instacart case was "Indicative of theattention that you can expect all of us to pay to make surecompanies are abiding by the law and living up to theirobligations."

The California officials are asking the court to issue an orderpreventing Uber and Lyft from continuing to misclassify drivers andto impose penalties of $2,500 for each violation under the state'sUnfair Competition Law. The complaint seeks to enforce AssemblyBill 5, which codifies the worker classification test laid out bythe California Supreme Court in Dynamex OperationsWest v. Superior Court and ensures access to paidsick leave, disability, family leave and unemployment insurance.The suit seeks an injunction requiring the companies to comply with that law.

A spokesperson for Lyft said, "We are looking forward to workingwith the attorney general and mayors across the state to bring allthe benefits of California's innovation economy to as many workersas possible, especially during this time when the creation of goodjobs with access to affordable healthcare and other benefits ismore important than ever."

An Uber representative said that during an economic crisis, withfour million people out of work, officials and businesses should beworking to make it easier for people to quickly earn money.

"We will contest this action in court, while at the same timepushing to raise the standard of independent work for drivers inCalifornia, including with guaranteed minimum earnings and newbenefits," the company said in a statement.

Read more: 

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• Workers' side jobs contributing to increasedburnout
• What does California's new gig rule mean for healthinsurance coverage?