Austin drivers sue Uber, Lyft after companies leave city

Austin drivers sue Uber, Lyft after companies leave city

Drivers from Austin, Texas, are reportedly suing Uber and Lyft after the ride-hailing companies quickly ended their operations in the city last month.

The drivers allege the companies broke the law, claiming they had an obligation to give workers 60 days notice about a mass layoff, Reuters reported on Thursday.

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The law in question requires that in some cases companies pay missed wages and benefits that would have gone to workers during the 60 days.

Uber and Lyft left the Texas capital earlier this month after the city's voters didn’t reject a law requiring the companies to do fingerprint-based background checks of their drivers.

The companies had sought to defeat the law, insisting their checks are sufficient. But critics say companies only check names and that the vetting is insufficient.

The issue has resonance because of cases in which ride-hail drivers committed crimes.

One incident earlier this year in Kalamazoo, Mich., involved an Uber driver in a shooting. Uber claimed that because the Kalamazoo shooter didn't have a criminal record, no background check could have predicted his actions.

At the time, Uber estimated that roughly 10,000 drivers would be affected by the Austin decision — potentially putting them out of a job.

The companies spent millions trying to convince voters to reject the law, imposed by the City Council.

The drivers' case was filed in federal court in San Francisco, where both Uber and Lyft are headquartered.

It claims that the drivers are employees, rather than independent contractors, which is how Uber classifies them.

Uber and Lyft have moved to settle class-action cases claiming that their California drivers are employees. As part of the proposed settlements, Uber could pay as much as $100 million and Lyft roughly $27 million, but neither company has agreed to reclassify their workers.