The proposed class action lawsuit detailed on this page has been sent back to arbitration after U.S. District Judge Vince Chhabria ruled against the plaintiff’s argument that Lyft defaulted in a previous go at arbitrating the suit.
Initially part of a group of more than 100 drivers attempting to arbitrate worker misclassification allegations against Lyft, the plaintiff withdrew his claim in early 2019 and filed the case embedded at the bottom of this page, court papers state. Though the plaintiff alleged that Lyft essentially breached its arbitration agreement with drivers and therefore waived its arbitral rights the first time around, the California federal judgesided with the ride-hailing companyand granted Lyft’s motion to compel arbitration, denying the plaintiff’s insistence that the case proceed as a potential class action.
“Lyft did not default in arbitration,” court documents state, clarifying that the plaintiff “withdrew from arbitration” before the American Arbitration Association invoked its own suspension or termination of the proceedings. “Indeed, the only party in this case who defaulted … is [the plaintiff], who left the arbitral forum to press these claims in court.”
The plaintiff originally claimed Lyft failed to cooperate with the initial arbitration process by failing to pay filing fees to the American Arbitration Association and letting six months pass since his arbitration demand was first filed.
A class action alleges that Lyft illegally labels its drivers as independent contractors to avoid paying proper minimum and overtime wages, among other benefits.
The suit, filed in California’s Northern District, claims that since Lyft classifies its drivers as independent contractors, the ride-share company does not pay time-and-a-half overtime or provide meal breaks and itemized wage statements, both of which are required for bona fide employees. According to the lawsuit, Lyft also does not compensate drivers for work-related expenses, such as gas, mileage and car insurance costs, nor for “dead time” spent on the app while waiting for the next ride assignment.
Although Lyft’s compensation formula is based on the assumption that its drivers are independent contractors, the case argues that the workers do not meet the standards for this classification due to the level of control Lyft exerts over its drivers.
For example, Lyft, according to the complaint, forbids drivers from soliciting riders’ contact information and requires the workers to reject requests to drive riders outside of the Lyft platform. Lyft also sets its drivers’ rates of pay, assigns rides, requires drivers to carry their own insurance, and holds workers to certain professional standards, the lawsuit says.
The complaint claims these practices are indicative of the level of control Lyft has over workers, one of the main factors in determining whether an employee qualifies as an independent contractor. Although Lyft does allow drivers to decline rides, the defendant penalizes them for doing so, and reserved the right up until 2018 to terminate drivers’ employment if their acceptance rate dropped below 90 percent, the complaint says. All told, the lawsuit argues that those who drive for Lyft are subject to on-the-job barriers that prevent them from establishing any autonomous business that their independent contractor status should afford.
“By working for Lyft, Plaintiff has not independently made the decision to go into business for himself,” the complaint states. “Lyft has unilaterally determined that drivers are an [sic] independent contractors while precluding them from taking the usual steps toward promoting and establishing independent business, such as forming business relationships with Lyft customers or otherwise promoting their services to the public.”
According to the suit, the lead plaintiff originally sought to resolve his grievances through arbitration, but Lyft defaulted on this alternative form of dispute resolution when it failed to pay the associated fees.
The putative class looks to cover all drivers who drove for Lyft in California between July 2, 2016 and the judgment of the case.