Lyft Driver Bonus Class Action Lawsuit Sent to Arbitration

Last week, the class action lawsuit accusing Lyft Inc., an online ride hailing company, of failing to honor $1,000 bonuses for drivers was sent to arbitration by a California magistrate judge.

Lead plaintiffs, Lyft drivers Casey Loewen and Jonathan Wright, alleged in their class action lawsuit filed in March that Lyft failed to honor the terms of a new driver promotion because the company did not process applications fast enough for drivers to be cleared by the Department of Motor Vehicles in time to offer their first ride and get the bonus.

According to U.S. Magistrate Judge Elizabeth D. Laporte, the terms of service of a 2014 agreement between the company and its drivers contained a provision for binding arbitration. Thus, to settle any legal disputes or claims, including the subject of this class action lawsuit, the parties must enter into binding arbitration.

The plaintiffs had argued against arbitration, contending that the terms of the agreement requiring arbitration was a “contract of adhesion” and therefore unethical because the drivers had no power over Lyft to change the terms of the agreement.

Judge Laporte disagreed with the plaintiffs. “Plaintiffs have not demonstrated any oppression or surprise beyond that inherent in any adhesion contract, and there is thus a low degree of procedural unconscionability,” wrote Judge Laporte in her order dismissing the Lyft class action lawsuit.

Judge Laporte also did not find the plaintiffs’ argument that the arbitration agreement was unenforceable because it was hard to read. According to the plaintiffs, the arbitration language was on page 22 of a 32-page contract in small lettering that many drivers accessed by using a mobile phone and it was difficult for many drivers to be aware of the terms.

“This is not an employment dispute involving nonwaivable statutory rights … but rather is more akin to a consumer dispute,” said Judge Laporte in her order. “Plaintiffs’ subjective inability to recall seeing the delegation clause (or the arbitration agreement generally) is not a basis for finding procedural unconscionability in this context.”

The judge also pointed out that the agreement also contained a clause printed in capital letters noting that the signer and Lyft both waive the right to a trial by jury or to participate as a plaintiff or Class Member in any class action lawsuit. “This is an important affirmation that Lyft’s arbitration provisions are valid and enforceable,” the company remarked in a statement. “We agree with Judge Laporte’s ruling that these types of disputes should be addressed in individual arbitrations.”

The plaintiffs are represented by R. Rex Parris, Alexander R. Wheeler, Kitty K. Szeto and John M. Bickford of R. Rex Parris Law Firm, and Daniel A. Carpio and Michael B. Turner of Dunn & Associates.

The Lyft Driver Bonus Class Action Lawsuit is Loewen, et al. v. Lyft Inc., et al., Case No. 3:15-cv-01159, in the U.S. District Court for the Northern District of California.