Uber and Lyft drivers have alleged the two companies are embroiled in a price-fixing scheme, causing drivers to earn less money for their work than they might have otherwise. Three drivers want to represent a class of all the drivers who opted out of Uber and Lyft’s arbitration clauses. They have asked the San Francisco County Superior Court to require the companies to stop price fixing—and pay them what they would have earned if they could set their own prices.
Uber and Lyft drivers work as independent contractors—a status both companies worked hard to establish. The proposed class action, led by Taje Gill, Benjamin Valdez and Esterphanie St. Juste, argues that if drivers are independent contractors, they should be able to set their own prices.
Currently, Uber and Lyft use algorithms to set prices, the mechanics of which are not disclosed to drivers or riders. Riders don’t know how much of the fare goes to the driver, while drivers can’t determine their destination or how much they’ll earn until they accept the assignment. According to the plaintiffs, this allows both companies to raise prices and lower driver pay.
The complaint alleges that this is a form of vertical price fixing, which is illegal under California’s Cartwright Act. Furthermore, by not allowing drivers to offer lower prices, the companies are harming competition in both labor and consumer markets.
Uber has also been named as part of a proposed class action against Postmates, Grubhub and Uber—another case in which Uber is accused of using restrictive price fixing. A San Francisco taxi company’s suit alleging illegal tactics to drive competitors out of the market was dismissed in November 2021.
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