BOSTON, May 13 (Reuters) - Massachusetts' attorney

general took Uber Technologies ( UBER ) and Lyft ( LYFT ) to

trial on Monday over allegations that the ride-share companies

are misclassifying thousands of drivers in the state as

independent contractors to avoid treating them as more costly

employees.

The non-jury trial in Boston comes amid broader legal and

political battles in the Democratic-led state and elsewhere

nationally over the status of drivers for app-based companies

whose services fuel the U.S. gig worker economy.

Massachusetts Attorney General Andrea Joy Campbell, a

Democrat, is asking a judge to conclude that drivers for Uber ( UBER )

and Lyft ( LYFT ) are employees under state law and therefore entitled to

benefits such as a minimum wage, overtime and earned sick time.

Studies have shown that using contractors can cost companies

as much as 30% less than employees.

Assistant Attorney General Douglas Martland in his opening

statement said the companies' algorithms, pricing policies and

operating standards gave them a level of control over their

drivers that belied any claim that they work independently.

He said the drivers are given little time to decide whether

to accept a ride request from a user -- just 15 seconds -- and

are never told up front how much riders will be paying them and

the companies before letting them in their vehicles.

"What entrepreneur would do that?" Martland asked Suffolk

County Superior Court Judge Peter Krupp, who will decide the

case.

Lawyers for the companies argued the state misunderstood

their businesses, saying the main employees on their payrolls

were data scientists and others who fine-tune the apps they

provide that connect independent drivers with potential riders.

"Lyft ( LYFT ) works for drivers, not the other way around," said

Felicia Ellsworth, Lyft's ( LYFT ) lawyer.

Uber ( UBER ) counsel Michele Maryott argued that drivers value the

flexibility of being able to drive when they want, allowing them

to tailor their work around children, other jobs and

appointments and provide services only part time.

"The flexibility is critical for them," she said. "These

drivers don't need to show up at all, much less at a specific

time, like employees do."

She and Ellsworth warned that a ruling requiring the

companies to treat the state's 55,000 Uber ( UBER ) drivers and 35,000

Lyft ( LYFT ) drivers as employees could force them to cut or halt

operations in Massachusetts.

The case went to trial a week after Massachusetts' highest

court heard arguments over whether to allow an industry-backed

ballot measure to go before voters in November that defines the

drivers as contractors but entitles them to some new benefits.

The court appeared open to allowing some version of that

proposal to go on the ballot along with a rival, labor-backed

ballot measure that seeks to allow the drivers to unionize.

The lawsuit at issue in Monday's trial was filed in 2020 by

Campbell's predecessor, Maura Healey, now the state's Democratic

governor. Should the state prevail, it has said the companies

could face large penalties for not properly classifying their

drivers.

Should Uber ( UBER ) and Lyft ( LYFT ) lose the trial but succeed at the

ballot box, Campbell's office has said the ballot measure would

only govern the companies' conduct moving forward and that they

could face large penalties for past misclassification.

By not classifying their Massachusetts drivers as employees,

Uber ( UBER ) and Lyft ( LYFT ) avoided paying $266.4 million into workers'

compensation, unemployment insurance and paid family medical

leave over 10 years, according to a report by the state auditor.