According to an article in the Wall Street Journal, Uber & Lyft are both being sued in California courts and the issue is whether the drivers for these companies are “independent contractors” or employees entitled to all the protections that employee status brings under California law.

Both cases are moving forward to the jury trial stage, with both courts refusing to decide the issue procedurally through a Motion for Summary Judgement. Apparently, it will be up to the jury to decide whether the drivers are employees or not. Under California Law, certain protections such as the right to organize, minimum wage, overtime laws, etc apply only to employees and not independent contractors.  If the juries decide that these drivers are employees, as opposed to the current status of “independent contractors,” substantial changes could be in store for Uber & Lyft. First, it will obviously cut their profit margins down with the additional influx of employees. Second, it also changes issues such as whether Uber & Lyft can be sued for accidents that occur while the driver is not carrying a customer, and whether their drivers will be treated under the common carrier, as opposed to the normal,  standard of care they now operate under.  Third, it will set precedent in California and provide persuasive legal authority for other states and countries, although a loss in Court will undoubtedly be appealed.

If you enjoy using Uber or Lyft, pay attention to the litigation brewing in the City by the Bay, it could someday affect the rates you pay as well.