Tara Burd San Diego Civil litigation attorney says “Lyft and Uber, two popular start-up ride-hailing services, have recently faced proposed class-action lawsuits from their drivers in San Francisco. Both cases are spurred by drivers’ demands for reclassification as employees, rather than their current state as independent contractors.”
As contractors, drivers have to pay for gas and vehicle maintenance costs themselves. As employees, San Francisco drivers would be entitled to reimbursement for these expenses from their respective companies. There are many other start-ups relying on large networks of individuals to provide services such as clean houses or rides. These lawsuits could threaten the valuations of these related companies with similar contractor business models, explaining why the cases have been widely and publicly followed.
In the case of Lyft, a settlement was filed on Tuesday evening, and is currently waiting on approval by U.S. District Judge Vince Chabria. The hearing will be in San Francisco on February 18. The Lyft settlement involves giving drivers more workplace protection and benefits, without reclassifying them as employees. It proposes for Lyft to pay $12.25 million, and to only be able to deactivate drivers for specific reasons – such as low passenger ratings – and to give those drivers the opportunity to address those issues before deactivation. Lyft will also agree to pay the arbitration expenses of drivers who wish to challenge their deactivation, or to dispute their compensation rates.
Reuters notes that while the Lyft drivers did not earn the reclassification as employees that they desired, the benefits are still significant, and less complicated and costly to Lyft than reclassification would have been. Meanwhile, Uber, which has been the target of far more legal complaints from drivers, did not get away with a settlement. Instead, it is now the subject of a December 2015-certified class-action lawsuit, scheduled for a June 2016 trial in San Francisco. It will then be decided whether Uber drivers are independent contractors or employees. In addition to lack of gas and vehicle maintenance expense reimbursements, the Uber class-action suit contests Uber’s practice of telling passengers that gratuity is included and not to tip the drivers, while drivers never receive any gratuity. A December 2015 decision extended the class to encompass all California Uber drivers who have directly contracted with Uber since 2009, whereas a previous class certification order excluded drivers who joined Uber in June 2014 or afterwards. The December 2015 decision ruled this previous class certification illegal, and therefore unenforceable.
For more information visit Tara Burd’s Who Is Page here in the Journal
San Diego Civil Litigation Attorney Tara Burd
You may contact her at her office
T.Burd Law Group
945 Fourth Ave., #307
San Diego, CA 92101
Or by telephone 858-215-2873