“A new report from the UC Berkeley Labor Center finds that Uber and Lyft avoided paying California $413 million in state unemployment insurance (SUI) taxes by misclassifying drivers as independent contractors from 2014 to 2019.
As far back as September 2015, California has ruled in favor of individual Uber drivers being reclassified as employees and thus entitled to unemployment benefits. With the arrival of AB5, a state law that requires companies to reclassify workers as employees, not contractors, if they exert significant control over workers, the business model championed by Uber and Lyft has faced a flood of legal challenges culminating in a landmark lawsuit by the state of California.
“This new report underscores the massive burden shift from multi-billion dollar gig companies to taxpayers and workers,” said California Labor Federation executive secretary-treasurer Art Pulaski. “Drivers are struggling to pay rent and keep food on the table while Uber and Lyft fleece taxpayers to the tune of a half-billion dollars. We demand these companies immediately begin paying their fair share for unemployment insurance and other social safety net programs we all rely upon.””