Lyft Driver Compensation Class Action Lawsuit Is Dismissed

Last week, a New Jersey federal judge tossed a class action lawsuit challenging Lyft Inc.’s method of calculating driver pay.

Plaintiffs Keara Nieves and Teddy Soloman claim in the Lyft class action lawsuit that the rideshare company’s terms of service suggest that drivers would be paid according to the estimated time and distance it would take to reach the passenger’s destination, which is the fare that is reportedly quoted to riders, but instead drivers were paid according to the actual minutes and miles driven. They say Lyft concealed this discrepancy.

The Lyft class action lawsuit asserted claims for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, and unjust enrichment.

U.S. District Judge Freda L. Wolfson found that the plaintiffs’ allegations failed to justify their expectation that the drivers’ payment would be linked to passenger fares.

“Because the terms of the TOS do not expressly set forth the terms of Lyft’s commission or connect driver payments to rider charges, the court cannot find, from the language of the TOS standing alone, that Lyft breached its contractual obligations to plaintiffs,” Judge Wolfson wrote in the order.

The plaintiffs also noted that Lyft drivers were not informed about the driver payment structure that is posted on the company’s commission structure page before they agreed to Lyft’s terms of service.

Judge Wolfson found that the drivers’ alleged inability to access this information prior to agreeing to the terms of service might raise some contract formation issues, but ruled that it was not sufficient to show breach of contract.

Judge Wolfson said that the plaintiffs could not include the commission structure page as part of the terms of service, and that, even if they could do so, the plain language of the page clearly shows a potential pricing discrepancy in the amount the rider is quoted and the amount the driver is compensated for the same ride.

The plaintiffs’ claim for breach of the implied covenant of good faith and fair dealing was also dismissed as Judge Wolfson found again that the plaintiffs’ complaint was based on Lyft’s alleged failure to make the commission structure page available to drivers, which she says is another contract formation issue rather than a breach of contract.

Judge Wolfson also dismissed the plaintiffs’ allegations for breach of the covenant of good faith and fair dealing, again citing potential contract issues instead of breach of contract issues. She further tossed the fraud and unjust enrichment claims, finding they were linked to Lyft’s performance obligations under the terms of service.

The judge said she would, however, allow the plaintiffs to file an amended Lyft driver pay class action lawsuit if they identify any other contractual language that supports their claim.

Judge Wolfson gave the plaintiffs 30 days to file an amended Lyft class action lawsuit.

Nieves and Solomon are represented by Stephan T. Mashel, Amy C. Blanchfield and Peter Velenzano of Mashel Law LLC.

The Lyft Driver Pay Class Action Lawsuit is Keara Nieves, et al. v. Lyft Inc., Case No. 3:17-cv-06146-FLW-DEA, in the U.S. District Court for the District of New Jersey.