While U.S. District Judge Ronnie Abrams agreed with the plaintiff’s argument that Lyft drivers fall under an exemption to the Federal Arbitration Act (FAA) that applies to a class of workers “engaged in interstate commerce,” she ruled that the arbitration clause in the plaintiff’s contract is still enforceable under New York law.
“As a general matter, the inapplicability of the FAA does not render an arbitration clause void when it is otherwise enforceable under state law,” Judge Abrams wrote in a March 9 opinion and order.
Given the plaintiff is a New York City-based Lyft driver looking to represent other New York drivers, the state “clearly has the greatest interest in the litigation,” the judge stated, ruling that “New York arbitration law applies.”
Lyft, Inc. faces a proposed class action lawsuit in New York over its apparent policy to forcibly log off from its ride-hailing app drivers who have completed fewer than 180 rides in a 30-day period.
The plaintiff, a driver from Astoria, Queens, claims Lyft’s 180-ride policy has proven particularly burdensome in that he’s been unable to work given the steep decline in ridership due to the COVID-19 pandemic. In all, the plaintiff asserts Lyft’s forced log-out policy amounts to “nothing less than short-term layoffs” for those who need the availability of full-time driving work to shoulder New York City living expenses.
“These drivers are now earning hundreds of dollars less per week,” the suit claims, adding that if Lyft’s alleged breach of contract “continues unchecked,” drivers could lose out on thousands of dollars per year in take-home pay.
In its early days, Lyft recruited an “unlimited number” of drivers by effectively bargaining the possibility of a decent living in exchange for logging enough hours behind the wheel, the lawsuit says. For years, according to the case, Lyft promised New York drivers that it would go so far as to cut its percentage commission from riders’ fares for those who drove 30-49 hours per week, and eliminate its commission cut entirely for workers who drove 50 or more hours per week.
Though many bought into Lyft’s promise of gainful, full-time work, oversaturation and over-recruitment soon threatened the ability of drivers to earn a decent living, the lawsuit says. While Lyft has been able to withstand such, drivers, classified by the company as independent contractors, have endured less take-home pay and the dilution of the total number of available trips to pick up as more and more Lyft vehicles populated the city, according to the suit.
In 2019, Lyft and New York City sparred through litigation over minimum pay regulations and limits on new vehicle licenses—Local Laws 150 and 147, respectively—passed the previous fall in an attempt to address what the suit calls the “crisis” in the taxi and for-hire vehicle transportation industry related to declining incomes. The laws passed by the city limited the issuance of new for-hire vehicle licenses and empowered the New York City Taxi and Limousine Commission to roll out earnings standards for those working for high-volume operators such as Uber and Lyft, the case says.
After losing its lawsuit against the city, Lyft, in apparent violation of its contract with workers, took measures to limit drivers’ access to its app as a means to sidestep New York City’s newly passed wage rules, the suit says. The issue, the plaintiff says, is that while Lyft has long maintained a policy of penalizing drivers who’ve failed to respond to trip requests or terminating others for cause, the company has until recently never suspended access for those who were “ready, willing, and able” to make trips. As the suit tells it, nothing in Lyft’s contracts empowers the company to limit a driver’s app access while their account remains active. Nevertheless, the case alleges, Lyft quietly implemented a policy change in October 2019.
From the complaint:
“On or about October 1, 2019, Lyft increased the trip number threshold for exempting drivers from the forced log-off policy from 100 trips within the previous 30 days, to 180 trips within the previous 30 days. This change became effective on October 4, again depriving drivers of sufficient notice to allow them to attempt to qualify for the new threshold and avoid being subject to restricted working hours.”
The plaintiff alleges that in the face of Lyft’s representations that drivers shall not be subject to limitations on their ability to access its app, the company’s forced log-out restrictions amount to a “material breach” of its contracts with workers. The man claims that after returning to New York from a trip home to Bangladesh to tend to his ill mother in January 2020, he had restricted access to Lyft’s app due to being unable to perform at least 180 trips within the prior 30 days. The case says the plaintiff was able to work “roughly half as many” online hours for Lyft, taking home significantly less pay, than he had before he took time off.
According to the suit, the plaintiff again returned to Bangladesh in February 2020 to tend to his sister after learning she had fallen into a coma. After returning to New York on March 3 amid the COVID-19 pandemic, the plaintiff has been unable to work while ridership with Lyft remains precipitously low, the case says.