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Photo: Justin Sullivan/Getty Images

California's attorney general, along with city attorneys for San Francisco, Los Angeles and San Diego, is suing Uber and Lyft over the companies' classification of drivers are independent contractors instead of employees.

Why it matters: This is the latest move in a long-running effort to get the companies to reclassify their drivers. It follows multiple lawsuits from individual drivers over the years, as well as last year's new California law codifying a state supreme court decision that makes it harder to classify workers are contractors.

Details: The lawsuit seeks penalties and damages, and aims to get the companies to stop classifying drivers are independent contractors.

  • Along with enforcing the new labor law, known as AB5, the lawsuit also cites the state's Unfair Competition Law, arguing that the companies are getting unfair advantages over others that are classifying their workers as employees.

While the lawsuit is focused on Uber and Lyft, the attorneys told reporters during a press call that they are monitoring other gig economy companies and are not ruling out taking further action.

Between the lines: The lawsuit could have national ramifications for gig economy companies if other states decide to adopt similar laws, or if companies decide to shift their business models if forced to do so in California.

Meanwhile: Uber, Lyft, and other gig economy companies are hoping to overturn the law via a state ballot measure in November. Uber, Postmates, and drivers have also filed a lawsuit against the state over the law.

From Uber:

"At a time when California’s economy is in crisis with four million people out of work, we need to make it easier, not harder, for people to quickly start earning. We will contest this action in court, while at the same time pushing to raise the standard of independent work for drivers in California, including with guaranteed minimum earnings and new benefits."
— Uber spokesperson

From Lyft:

"We are looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever."
— Lyft spokesperson

Go deeper

Lyft beats Wall Street expectations for Q2

Photo: DON EMMERT/AFP via Getty Images

Lyft Wednesday posted narrower losses and higher revenue than expected for the second quarter, though revenue did fall 61% from the same period last year.

Why it matters: Lyft's business has been hard hit by the coronavirus pandemic as people stay home.

Biden's Day 1 challenges: Systemic racism

Photo illustration: Sarah Grillo/Axios. Photo: Kirsty O'Connor (PA Images)/Getty Images

Advocates are pushing President-elect Biden to tackle systemic racism with a Day 1 agenda that includes ending the detention of migrant children and expanding DACA, announcing a Justice Department investigation of rogue police departments and returning some public lands to Indigenous tribes.

Why it matters: Biden has said the fight against systemic racism will be one of the top goals of his presidency — but the expectations may be so high that he won't be able to meet them.

Caitlin Owens, author of Vitals
1 hour ago - Health

Most Americans are still vulnerable to the coronavirus

Adapted from Bajema, et al., 2020, "Estimated SARS-CoV-2 Seroprevalence in the US as of September 2020"; Cartogram: Andrew Witherspoon/Axios

As of September, the vast majority of Americans did not have coronavirus antibodies, according to a new study published in JAMA Internal Medicine.

Why it matters: As the coronavirus spreads rapidly throughout most of the country, most people remain vulnerable to it.