A Monday filing in the Southern District of New York claims ride-hailing company Lyft misclassified its drivers as independent contractors when, under New York law, they should be classified as employees. According to the complaint, Lyft’s error has caused it to underpay its New York drivers and unlawfully require them to pay business expenses, like the cost of maintaining their vehicles, gas, insurance, and phone and data costs.
In support of its argument that drivers are employees, the complaint sets forth examples of the degree of control Lyft asserts over its drivers and the rides they give. The filing claims that when driving for the company, drivers “are not engaged in their own transportation business,” rather, they “wear the ‘hat’ of Lyft.”
Among other examples, customers cannot choose their drivers, and instead, Lyft assigns particular rides to drivers. In addition, Lyft sets and changes the rate of pay for drivers’ services at its sole discretion. Furthermore, the complaint says, if a rider does not pay, the company, not the driver, incurs the loss.
The complaint states five counts for relief under New York Labor Law for wage and overtime pay, business expense, and recordkeeping violations. On behalf of a class of New York Lyft drivers, the plaintiff seeks damages and declaratory and injunctive relief obligating Lyft to reclassify its New York drivers. The plaintiff and putative class are represented by Lichten & Liss-Riordan P.C.
Notably, the lawsuit is not the first of its kind in New York. Last year, amidst the COVID-19 pandemic, a Brooklyn federal court ordered New York to pay Lyft and Uber drivers unemployment insurance benefits. Similarly, on Mar. 30, 2020 the New York Court of Appeals held that couriers of the food delivery service Postmates were employees and thus eligible for unemployment benefits during the pandemic.
The latest complaint also comes after a California court struck down a voter statutory initiative, known as Proposition 22, classifying gig workers as independent contractors. Last week, the San Francisco Bay Area state court ruled that the law improperly curtailed legislative rights in violation of the state’s constitution.