Lyft Class Action: NYC Drivers Double-Charged for Workers’ Comp Fee

Last week, Lyft Inc. was hit with a class action lawsuit alleging the company illegally deducts workers’ compensation fees from New York City Lyft drivers’ pay.

Plaintiff Gustavo Camilo, a Lyft driver in New York City, says Lyft has been charging passengers a 2.5 percent contribution to the New York City taxi workers’ compensation fund and deducting the same amount from Lyft drivers’ pay.

“As a result, defendants double-charged every driver,” Camilo alleges in the Lyft class action lawsuit.

According to the Lyft class action lawsuit, when the ride-sharing company began operations in New York, it established three subsidiary corporations to comply with the state law requiring it to provide insurance coverage (called Black Car Fund Insurance) to New York drivers. The Black Car Fund is reportedly used to offer drivers workers’ compensation if they are injured in a work-related accident.

Because Lyft is a Black Car Fund registered provider, it is required to collect a fee from each passenger in the amount of 2.5 percent of the fare, the Lyft class action lawsuit alleges.

“Defendants are not allowed to collect the 2.5% fee from their drivers but solely from their passengers,” Camilo states in the Lyft class action lawsuit.

“As a result, Plaintiffs and the Class were illegally, negligently, fraudulently, and unjustly deprived of the earned fares for their work.”

Camilo claims Lyft included the Black Car Fund Fee in an 11.4 percent “administrative” charge paid by each driver for every fare.

According to the Lyft class action lawsuit, Lyft notified drivers in August that it would no longer charge the administrative fee. However, Camillo claims Lyft failed to disclose the improper withholding of the Black Car Fund fee.

“Oddly, defendants tried to cover up their past fraudulent practices with a positive email suggesting defendants had changed their practices for the sole benefit of the plaintiffs,” Camilo alleges in the Lyft class action lawsuit.

The Lyft class action lawsuit asserts claims for unlawful wage deductions under New York Labor Law and breach of contract, fraud and unjust enrichment.

Camilo notes that Lyft has placed an arbitration clause in its agreements, which prohibits drivers from pursuing Class claims, but he argues that the arbitration agreement is unconscionable and unenforceable as against law and public policy.

According to the Lyft class action lawsuit, both the 7th U.S. Circuit Court of Appeals and New York appellate courts have found that such arbitration agreements violate the National Labor Relations Act. Further, Camilo argues that the individual arbitration proceedings for an estimated 65,000 New York City Lyft drivers would be impractical.

The Lyft class action lawsuit was filed on behalf of Camilo and a proposed Class of individuals who were employed by Lyft as taxi drivers in New York City at any time since January 2014.

Camilo is represented by Luigi Izzo of the Law Offices of Joseph A. Romano PC.

The Lyft NYC Drivers’ Workers’ Comp Fee Class Action Lawsuit is Gustavo Camilo v. Lyft Inc., et al., Case No. 159265/2017, in the Supreme Court of the State of New York, County of New York.