Two suits filed in a California federal court (Cotter v. Lyft, Case No. 13-4065, and O’Connor v. Uber, Case No. 13-3826, U.S. District Court, Northern District of California) will address whether drivers of the popular taxi-alternatives Uber and Lyft qualify as “employees.” If so, they would be entitled to compensation for expenses, which would include gas, maintenance, and cleaning of the vehicles. Currently, drivers for both companies must cover all incidental expenses out-of-pocket, which leaves Uber and Lyft drivers footing the bill for everything from oil changes to car washes.

On January 29, 2014, the federal court judge in the Lyft case stated that “people who do the kinds of things that Lyft drivers do here are employees,” strongly implying that the popular taxi alternative will be liable for added compensation to its drivers.

Drivers for the companies are subject to hiring and firing by their respective organizations, and are required to pass background checks and accept a certain number of rides, all factors that would be indicative of an employer-employee relationship. However, neither company appears to require control over where the drivers operate or what time they do so, factors that would tend to show independent contractor status.

The suit could have a wide-ranging impact nationally as both Uber and Lyft have exploded in popularity, with Uber alone valued at nearly $40 billion dollars. Look for similar lawsuits nationwide to erupt if an employment relationship is found to exist between drivers and their respective companies.