The ride-sharing industry faces another challenge to its business model, this time on account of an FLSA lawsuit alleging that Lyft drivers are denied minimum wage and overtime compensation because they have been misclassified as independent contractors rather than employees. Frederic v. Lyft, Inc., d/b/a Lyft Florida, Inc., No. 8:15-cv-01608, (M.D. Fla.July 8, 2015).
According to plaintiff Fequiere Frederic, who drove one of the familiar pink-mustached shared rides for almost two years, Lyft exercised almost complete control over how and when he would perform his work and, he claims, he should have been considered an employee. For example, according to Frederic, Lyft controlled the means by which he performed his work, it decided who would be hired and fired, it retained the right to terminate the Lyft “platform” that would prevent drivers from picking up riders, his tips were subject to a 20 percent administrative fee, Lyft set drivers’ rates of pay, it required him to accept all customer discounts and promotions, and he had to comply with Lyft’s requirements regarding his car’s appearance and cleanliness. In sum, Frederic contends that “in an effort to avoid providing its drivers with the minimum benefits and protections afforded employees under the FLSA and Florida law, Lyft has willfully, uniformly, and unilaterally classified each and every one of its drivers as independent contractors, rather than employees, despite the fact that the factual circumstances of the relationship between Lyft and its drivers clearly demonstrate that Lyft drivers are in fact employees of the company.” Lyft has not yet responded to the lawsuit.
The Frederic case comes on the heels of two recent decisions in California involving Lyft and its competitor Uber, where separate courts denied summary judgment and found that it was up to a jury to decide whether their respective drivers were employees or independent contractors. O’Conner v. Uber Technologies, Inc., — F.Supp.3d —, 2105 WL 1069092; Cotter v. Lyft, Inc., 60 F.Supp.3d 1067 (N.D. Cal. 2015). For anyone who has ever wrestled with the issue of whether a worker is an employee or an independent contractor, Judge Vince Chhabria said it best in his ruling on the Cotter matter: “Lyft drivers don’t see much like employees,” but then again “Lyft drivers don’t seem much like independent contractors either.” So goes the independent contractor/employee conundrum.
Andrew S. Naylor
Waller Lansden Dortch & Davis, LLP