Consumer Fraud

Lyft class action settles for $12.25M; adds benefits for drivers

UBER flickr image 375x210 Lyft class action settles for $12.25M; adds benefits for driversA recent class action settlement in California means that drivers for Lyft will be granted extra workplace protections. Despite not being classified as full employees under the Fair Labor Standards Act (FLSA), Lyft drivers are now eligible for specific benefits without endangering the company’s business model.

According to the Lyft settlement agreement, Lyft drivers involved with the class action are splitting the settlement’s sum of $12.25 million and receiving multiple benefits, including new rules regarding driver deactivation. Before the settlement, Lyft drivers could be removed from the company’s system without warning, such as for low passenger ratings.

The new rules allow the Lyft drivers to plead their case to the company prior to deactivation, allowing them more job security. Lyft is even responsible for paying all of the arbitration expenses for drivers wishing to challenge their prior deactivation or wage dispute.

The business models of Uber and Lyft have given rise to new controversy regarding how the FLSA affects them and whether their drivers should be treated as full-time employees. Drivers are wishing to push the two ride-hailing services to start reimbursing drivers for gas and vehicle expenses. Lyft drivers are still not eligible to receive this form of reimbursement.

Shannon Liss-Riordan, one of the attorneys for the Lyft plaintiffs, found the settlement to be a significantly positive development, despite not getting everything the claimants’ wanted. Liss-Riordan noted also that she has seen a surge of Uber drivers coming forward about similar issues regarding deactivation from the company’s platform, as well as wage disputes.

“We have not been hearing so many concerns from Lyft drivers, which leads us to believe that Lyft is treating its drivers with more respect than Uber is treating its drivers,” Liss-Riordan said.

U.S. District Judge Vince Chhabria must approve the deal before it is final. A hearing on its preliminary approval is scheduled for later this month.

Source: Claims Journal