Uber and Lyft drivers win ruling on unemployment benefits

July 29: Drivers for Uber and Lyft won a key victory on Tuesday in their continuing effort to be treated like other workers when a federal judge in New York ruled that the state must promptly begin paying them unemployment benefits.

Many drivers have waged a long legal and political battle with the companies over their employment status. Uber and Lyft have maintained that drivers are independent contractors who are not entitled to standard employment protections, such as a minimum wage, overtime pay and unemployment insurance.

The companies have gone to elaborate lengths to prosecute this argument, including spending tens of millions of dollars on a ballot measure that would exempt their drivers from a California law that effectively classifies them as employees.

In her ruling, Judge LaShann DeArcy Hall appeared to come down firmly on the side of drivers in this broader debate, citing “an avoidable and inexcusable delay in the payment of unemployment insurance”, The New York Times reported. 

The ruling resulted from a lawsuit filed in late May by drivers and an advocacy group called the New York Taxi Workers Alliance, who argued that the state was taking months to pay unemployed drivers while typically processing benefits for other workers in two to three weeks. Although the lawsuit was filed against the state rather than Uber and Lyft, the judge called out the companies for extensive delay tactics that had made it difficult for drivers to receive the benefits they are owed.

Under the ruling, the state Department of Labor has seven days to convene and train a “work group” of several dozen staff members who will identify backlogged claims by drivers who have sought “reconsideration” after being told that they were ineligible, and take the necessary steps to pay them promptly. The state has 45 days to resolve this backlog.