Santa Clara, CA: Lyft Inc. is facing an employment class action lawsuit alleging the ride-hailing service uses a calculation method for wages that results in the company failing to pay its drivers less than the amount they are actually owed.
Lyft is an app-based service operating in California and at least 33 other states, according to the lawsuit. Riders arrange for and pay for rides through the Lyft App.
Filed in federal court in New Jersey, the lawsuit alleges that Lyft states in its contracts that its drivers will receive a portion of the fare charged to riders, which is based on an estimation of the time and distance it will take to complete the ride. However, according to the complaint, drivers’ pay is actually based on a separate fare calculation reflecting actual miles and minutes driven. Therefore, the drivers are receiving less than they are contracted to receive.
The proposed nationwide class consists of drivers who entered into contracts with Lyft to provide transportation services to customers in exchange for a portion of the fare Lyft charges riders, plus tips if applicable and minus service fees, cancellation fees, damage fees, tolls, surcharges and taxes. The class would include drivers who opted out of Lyft’s arbitration agreement.
Named plaintiff Keara Nieves, a Long Branch, New Jersey, resident, has worked as a Lyft driver since 2016. Nieves alleges that the Lyft driver’s contract sets forth, in part, that “all fare payments are subject to a Lyft commission ...You will also receive any tips provided by riders to you, and the tips will not be subject to any Lyft commission.” Lyft also reserves the right to set and change prices for services and commission, the complaint states.
Nieves claims that she understood she would be paid an amount equal to the fare charged to the rider plus applicable tips and minus Lyft’s commission of 20 percent to 25 percent, depending on the time of day, and service fees, cancellation fees, damage fees, tolls and other surcharges for rides she successfully completed, the complaint states.
However, in practice, Lyft pays its drivers based on a calculation of distance and time actually driven, according to the complaint. This results in a discrepancy between the fare charged and the "improper" basis Lyft uses to pay its drivers is concealed from drivers, the plaintiffs assert. “Specifically, defendant Lyft has retained a larger portion of the passenger fare than they promised they would retain in the [driver agreement],” the complaint states.
Nieves is represented by Stephan T. Mashel of Mashel Law LLC. The case is Nieves v. Lyft Inc., case number 3:17-cv-06146, in U.S. District Court for the District of New Jersey.
