Lawsuit Alleges Lyft is Misclassifying Employees as Independent Contractors

A California Lyft driver has filed a lawsuit alleging the company is misclassifying employees as independent contractors.

Donald B. of Burbank claims he began working as a full-time Lyft driver in March 2016. According to the lawsuit, he estimates he drives 42 to 70 hours each week, putting anywhere from 500 to 1,100 miles on his vehicle. Donald and other Lyft drivers allege they should have employee rights to expense reimbursement, overtime pay and minimum wage.

According to the Lyft complaint, the company has violated and continues to violate the Fair Labor Standards Act (FLSA), the California Labor Code, the California Industrial Welfare Commission’s Wage Order 9-2001 and California’s Unfair Competition Law. The latter is designed to protect employees from worker misclassification.

Lyft requires drivers to sign its terms of service agreement, and Donald did not opt out of the arbitration clause included in the agreement. In an attempt to litigate his claims through arbitration with the American Arbitration Association, Donald allegedly was told Lyft did not pay the fees needed for his claim to proceed. Donald then filed a lawsuit.

California Rules on Misclassifying Employees as Independent Contractors

Misclassifying employees
as independent contractors can save employers loads of money that would have been necessary to spend on employee benefits, such as health insurance, paid time off, overtime pay, retirement plans and unemployment insurance.

CBS Sacramento reported on a new ruling by the California Supreme Court created a new definition of the category of “independent contractor” in the state. California workers are assumed to be employees unless all of the following can be proven:

• The worker is not under the control or direction of the employer
• The worker performs duties not within the hiring company’s realm of business
• The worker is normally engaged in an independently established occupation or trade of the same nature as the work they perform for the hiring company

According to the Lyft lawsuit, Lyft drivers should be classified as employees for several reasons, including the following:

• Lyft sets the fare a rider must pay.
• The work Lyft drivers perform is in the usual course of the company’s business, which is providing driving services.
• Lyft drivers provide the service that Lyft markets to the public.
• Lyft drivers do not engage in an independently established business of driving, and in fact, Lyft requires its riding clientele to request rides and pay its drivers through the Lyft phone app.
• Lyft allegedly reports on its Securities and Exchange Commission Form S-1 Registration Statement that Lyft’s “business depends largely on [its] ability to cost-effectively attract and retain qualified drivers[.]”

In the past, Lyft has insisted it is a technology company, not a transportation company. In May, Lyft was a defendant in a federal class action lawsuit alleging the company failed to provide wheelchair-accessible vehicles. FastCompany.com reported that Lyft responded by saying the company wasn’t obligated to adhere to the Americans with Disabilities Act because “it is not in the transportation business.”

The Misclassifying Employees as Independent Contractors Lawsuit is Donald B. v. Lyft, Inc., Case No. 3:19-cv-04808, in the U.S. District Court for the Northern District of California, San Francisco Division.

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Even if you are classified as an independent contractor, you may be entitled to minimum wage, overtime pay, reimbursement for expenses, and meal and rest breaks, among other employee benefits.

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This article is not legal advice. It is presented 
for informational purposes only.