The ridesharing company Lyft is facing numerous lawsuits in California. 4 of the most common grounds are:
- car accidents caused by Lyft drivers that hurt others on the road,
- sexual assaults committed by Lyft drivers on passengers,
- misclassification of Lyft drivers as independent contractors, and
- wage theft from that misclassification.
All of these claims are related.
1. Car accidents caused by Lyft drivers
One of the most common grounds for a lawsuit against Lyft is for a car accident. Ridesharing drivers negligently cause motor vehicle crashes during the normal course of their job. When they do, victims can file an insurance claim or a personal injury lawsuit to recover compensation. These victims can be:
- other car drivers,
- motorcyclists,
- pedestrians, or
These victims can suffer serious injuries in these accidents, including:
- broken bones,
- head injuries,
- spinal cord injuries,
- disfigurements, and
- neck injuries.
Some of these injuries can be fatal. In fact, ridesharing services have been linked to a 3 percent increase in road fatalities.[1] When the crash is fatal, the victim’s loved ones can file a wrongful death claim.
Victims of California Lyft accidents generally file an insurance claim first. Lyft often touts its $1,000,000 liability insurance policy. However, when claims are made against the company, Lyft frequently tries to evade liability by saying that the driver is an independent contractor, not an employee. This is especially common when there is no passenger in the Lyft vehicle. When this happens, victims are left to pursue the driver, whose liability coverage is much lower. Lyft’s drivers only have to carry at least:
- $50,000 in bodily injury coverage per person,
- $100,000 in bodily injury coverage per accident and
- $25,000 in property damage.[2]
Very few carry more than the minimum. The low policy caps frequently leave victims undercompensated for their losses.
2. Sexual assaults by drivers
There are also lawsuits in California for sexual assaults caused by Lyft drivers.
Numerous Lyft passengers, most commonly female passengers, have reported being:
- assaulted,
- raped,
- kidnapped,
- sexually assaulted, and
- falsely imprisoned.[3]
In most of these cases, the victim was alone. They called a Lyft vehicle to reach their destination. In many cases, they were leaving a party to go home and were inebriated. They used the ridesharing company as an alternative to drunk driving, just as Lyft has advertised itself. However, this put the passenger into a vulnerable position. The driver exploited that vulnerability and committed a sexual offense.
These lawsuits allege that Lyft did not adequately vet their drivers. In many cases, Lyft drivers have been discovered to have significant criminal histories. Lyft’s background checking process either failed to discover that criminal background or it found it but Lyft hired the driver anyway. The lawsuits claim that Lyft’s negligent hiring practices were a substantial cause of the victim’s harm.
3. Worker misclassification by Lyft in California
Lyft is also being sued in California over its labor practices. Most notably, Lyft’s business model relies on the idea that its gig workers are independent contractors, not employees. Recent changes to the law have influenced these claims.
In California, an independent contractor is generally a worker who performs a service for someone else, but who retains control over how the service is performed.[4] This is distinct from an employee. Employees have to follow their employer’s direction regarding how their job is to be done. This gives independent contractors far more control over their work. So long as they produce the expected results, they can set their own process.
The difference is important because independent contractors do not have the same employment protections as employees do. For example, independent contractors are not entitled to:
- overtime pay,
- the minimum wage,
- meal or rest breaks,
- unemployment insurance benefits,
- workers’ compensation,
- healthcare insurance,
- paid sick leave,
- compensation for their business expenses, and
- tax withholding.
Misclassifying employees as independent contractors is a common practice. Businesses frequently hire independent contractors, but then treat them like employees. This lets the business control the work the people provide, without providing the benefits their workers may be legally entitled to receive.
Lyft has long insisted that its drivers are independent contractors, not employees. Lyft has argued that it is a software business solely responsible for the Lyft app. The drivers who provide the app-based ride are in their own business venture.
However, misclassification lawsuits against Lyft claim that the company has exerted so much control over the work that the drivers provide that it makes the drivers employees. Some of these laws have been filed by drivers in class action lawsuits. Some have been filed by California’s attorney general.[5]
In the last few years, though, state law has changed. However, the employment status of Lyft’s drivers is still being litigated.
4. Wage theft
Many of the misclassification lawsuits against Lyft allege wage theft. These lawsuits claim that drivers:
- did not make the minimum wage while working,
- saw their pay fall below the minimum wage due to business expenses related to driving, such as by paying for their own gas, and/or
- worked overtime without being paid accordingly.
These lawsuits demand back pay from the ridesharing company.
What do these lawsuits have in common?
Many of the lawsuits that Lyft is facing have to do with its business decision to treat drivers as independent contractors, rather than as employees.
For car crashes, Lyft is using this employment relationship to evade liability. Generally, under employment law, employers are vicariously liable for losses caused by the negligence of their employees. This is known as the doctrine of respondeat superior.[6] By classifying its drivers as independent contractors, though, Lyft is trying to avoid liability for the crashes they cause. As independent contractors, drivers are liable for their own negligence. Classifying California drivers as independent contractors insulates Lyft from liability. It also reduces its costs for liability insurance.
For sexual assaults committed by its drivers, Lyft uses the employment relationship to distance itself from the acts of its workers.
The employment relationship between Lyft and its drivers is the issue in the misclassification and wage theft lawsuits that it is facing.
What are some recent developments in the lawsuits against Uber and Lyft?
Recently, there have been significant legal changes that have influenced the lawsuits against Uber and Lyft in the state of California.
In 2019, lawmakers in the California legislature passed a labor law concerning independent contractors.[7] The new law targeted the ridesharing industry in a way that defined drivers as employees. In response, ridesharing and other similar companies in the gig economy backed Proposition 22 on the ballot in 2020. Prop 22 created exceptions in the new law for ridesharing companies like Lyft Inc. and delivery apps like Doordash. It also included a minimum wage and healthcare coverage for people who worked at least 25 hours per week.[8]
Proposition 22 passed with 59 percent of the vote and became a new California law.
Several drivers sued, claiming that Proposition 22 unconstitutionally impeded on the state legislature’s powers. In 2021, a California superior court near San Francisco agreed and ruled that Proposition 22 was invalid. Ridesharing companies asked an appeals court to review the court ruling. On March 13, 2023, a California Court of Appeals overruled the superior court.[9]
An appeal to the California Supreme Court is likely.
Legal References:
[1] Rebecca Stropoli, “Ride-Sharing Services May Lead to More Fatal Accidents,” Chicago Booth Review (Dec. 10, 2018).
[2] See Lyft’s website, “All things insurance, all in one place.”
[3] See Cara Kelly and Tricia Nadolny, “Rape, assault allegations mount against Lyft in what new suit calls ‘sexual predator crisis,’” USA Today (Sept. 4, 2019) and Marco della Cava, “‘I started pounding on the windows’ — Uber passenger says Denver driver wouldn’t let her go,” USA Today (Apr. 17, 2018).
[4] California Labor Code 3353 LAB.
[5] Kate Conger, “California Sues Uber and Lyft, Claiming Workers Are Misclassified,” The New York Times (May 5, 2020).
[6] See, e.g., Mary M. v. City of Los Angeles, 54 Cal.3d 202 (1991).
[9] Castellanos v. California, No. RG21088725 (Mar. 13, 2023).
