Legal Investigation Looks into Independent Contractor Status of Lyft Drivers

Attorneys working with ClassAction.org would like to speak to anyone who lives in Washington, Oregon, Massachusetts, New York or Illinois and drove 40+ hours in a week (even once) for Lyft in the past three years.

Allegations persist that Lyft is misclassifying drivers as independent contractors and therefore illegally depriving them of overtime wages and other benefits that come with bona fide employment.

If you’ve driven for Lyft as a contractor in Washington, Oregon, Massachusetts, New York or Illinois, you may be able to take action to recover compensation for back pay and more.

What Am I Signing Up For?

You are signing up to participate in what’s known as “mass arbitration.” While different than traditional class action litigation, mass arbitration still allows a large group of people the chance to hold a company accountable for a potential violation of their rights.

Countless class action lawsuits have been filed against Lyft over the independent contractor issue; however, the company is arguing of late that its drivers agreed to an alternative form of dispute resolution known as arbitration when they accepted Lyft’s terms of service and therefore waived their rights to a class action lawsuit.    

This is why attorneys working with ClassAction.org believe drivers are better suited to participate in a mass arbitration against the rideshare company.

What Is Mass Arbitration?

First off, it’s important to understand what arbitration is. In general, arbitration is a way for two parties to resolve a dispute outside of the courtroom. An impartial third-party arbitrator – essentially acting as the judge or jury – will hear the case, ask questions and review evidence to ultimately come to a decision on the matter.

In a mass arbitration, hundreds or thousands of people file individual arbitration claims over the same issue – in this case, employee misclassification. 

Are Lyft Drivers Independent Contractors – Or Are They Really Employees?

It’s a debate that’s been going on for years, but attorneys suspect some Lyft drivers have been misclassified as independent contractors in violation of federal and state law.

There are a number of different “tests” and sets of criteria – at both the federal and state level – that can be used to determine whether a worker is an employee or a contractor; however, the level of control a company has over a worker is almost always taken into consideration. Essentially, the more control a company has over an individual, the less likely it is that they are a true independent contractor.

A number of proposed class actions filed against Lyft have argued that drivers should not be classified as contractors because of the amount of control the rideshare company exercises over these workers, among other factors.

The suits further argue that the drivers are employees because they are performing a service that’s part of Lyft’s usual course of business and that, without them, the rideshare company would not exist. In addition, the drivers cannot be independent contractors because they are not engaged in their own transportation business – and are simply wearing a “hat” for Lyft, according to the lawsuits.

Why Does Lyft Prefer to Classify Drivers as Independent Contractors?

Companies have a financial incentive to misclassify employees as independent contractors. A business can save a significant amount of money this way because it wouldn’t have to pay the minimum wage or overtime or offer benefits that come with bona fide employment.

If Lyft’s drivers were employees, as opposed to independent contractors, the company would likely have to raise prices for riders, be less flexible with drivers’ schedules and limit drivers’ ability to work for other platforms.  

Indeed, Lyft continues to fight to keep its drivers as self-employed contractors; however, just because a company says you’re an independent contractor – or even gives you a 1099 – does not mean that you actually are one under the law.

How Could Lyft Drivers Be Losing Money?

It’s been argued that misclassified drivers are missing out on receiving the minimum wage for all hours worked, which includes time spent driving to pick up passengers and driving while awaiting new assignments – in addition to time spent actually transporting riders.

Further, drivers may be getting deprived of time-and-a-half overtime wages when working more than 40 hours a week and may have been unlawfully forced to pay for business expenses. These expenses may include the cost of gas, insurance, vehicle maintenance, and phone and data costs.

How Much Money Could I Recover?

While there are no guarantees, it is estimated that successful claims could be worth $2,000 or more.

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