9 ms·

Lyft Settles Worker Classification Lawsuit for $12.25M

28 points by ndirish1842 11y ago

Laaw 11y ago
It'd be pretty damn cool if Lyft/Uber/Instacart/etc. could find a way to give their drivers benefits. I hope this ends up in Lyft doing more than just "looking into" those things. There's got to be a way to do this such that drivers don't get shafted, while still making a profit...
- hkmurakami 11y ago
  Someone's gotta pay. Right now it's the drivers paying via not having benefits. We can have a world where (1) costs are transferred to riders, (2) costs are eaten by Lyft, (3) costs are diffused through increased efficiency and utilization of the workforce -- this tends to manifest itself in overworking of employees though (ex: paying overtime rather than hiring more workers, as is often the case in manufacturing) I suppose that we could have a scenario for (3) where the goodwill entices riders to use Lyft more, which increases utilization of drivers (ex: collecting fares for X minutes / hour goes to X + N minutes / hour) and that can pay for the increased costs.
  - ProAm 11y ago
    > Someone's gotta pay. Right now it's the drivers paying via not having benefits. As a contractor you always pay for your own benefits. Every contractor does this (or chooses not to on their on volition). Every driver KNOWS they are a contractor, they should know what comes with being one, and it's no ones fault but their own if they don't.
  - st3v3r 11y ago
    Why should it ever have been an option for the drivers to be the ones paying?
- rqebmm 11y ago
  They're not incentivized because in the next 5-15 years they're going to be operating fleets of self-driving cars. They just need to float til then with whatever is the cheapest option.
revelation 11y ago
What stops new drivers from filing the same lawsuit? What if they don't settle and force the issue after Lyft has already previously agreed to a settlement?
- bsbechtel 11y ago
  I don't know with 100% certainty, but I am guessing rules for class action suits state that once an agreement is reached, the 'class' bringing the suit (i.e., the drivers in this case) cannot sue again for the same reason. That is, because new drivers would be a part of the same 'class' as the previous class action suit, they have technically agreed to the previous agreement, whether or not one individual driver agrees.
  - tyingq 11y ago
    If you received a notice, and opted out, or were not sent a notice...then you aren't part of the "class". The notice has to have an opt out procedure. Edit: If either of the above applies, you are free to bring your own suit.
  - CPLX 11y ago
    This is broadly correct. The part that preserves the rights of prospective plaintiffs to sue individually is contained in the opt-out provisions that are always a part of a class action, and involve notice and deadline requirements.
    - revelation 11y ago
      Hence why I qualified "new drivers". Obviously new drivers (after the settlement) can not have opted out or been part of the class.
  - st3v3r 11y ago
    Wouldn't that only be if Lyft doesn't continue doing the same thing?
  - DrScump 11y ago
mc32 11y ago
These lawsuits expose a couple of things, one there needs to be more kinds of work classifications than employee and contractor. Two, the benefits system, healthcare, whatever, is still not fixed and has a long way to go to cover all citizens, regardless of employment type and status. Another thing, is these platforms have more than one kind of participant, ones who utilize them as their main source of income, and those who utilize them as complementary source of income or as a part time/college/uni job. If these platforms would simply be a platform (who like yelp) let the provider sink or swim based on ratings, then they could avoid the problems stemming from their requirements [which makes the platform less ad hoc and more rule based thus leaning toward employee - yet the fear would be a degradation in service to end users and thus a threat to platform viability] One thing I'd like to know is whether people doing lyft or über full time do on average better or worse than their yellowcab counterpart.
- tyingq 11y ago
  Uber and Lyft get out of more than just paying benefits by classifying their workers as independent contractors. They also avoid paying their portion of the payroll taxes, liability for workman's comp, protective laws (minimum wage, unemployment coverage, for example). Edit: For those downvoting...you really think these exact things weren't discussed when Uber & Lyft were deciding how they would comp drivers? Heh.
  - tzier 11y ago
    Portion of payroll taxes is ~7.5%, plus an extra 2.5-10% for workers comp/etc depending on your rates. If they had to reclass as employees, they would just raise prices to end consumer 10-20% to compensate (or fund it via other's money like they're doing now to price out rest of market). They'd also put a cap on hours per week so drivers couldn't drive more than 30 hours per week. Companies aren't legally required to give benefits to part-time workers (up to 30 hours). The big draw of independent contractors is that you've just converted labor from a fixed cost to a variable cost. There are tons of Uber/Lyft drivers (namely, anyone not doing it full-time, which is the majority of drivers) who prefer this since they can drive as much or as little as they want.
rockarage 11y ago
Lyft is an inadequate competitor to Uber. You can't compete with Uber if you have a very similar business plan, a plan that involves taking too much money from drivers. The problem with all these platforms is that they believe they have to become fat middle men to satisfy their investors. I'm working on a platform that will exploit this inefficiency in the market.
- Everhusk 11y ago
  Curious about what you're working on... hit me up (link in my profile) if you want to chat. I'm working on something similar.
  - rockarage 11y ago
    This is the reason for my comment, looking for like minded individuals & teams.
    - joshjkim 11y ago
      same here - e-mail in my profile. i have a good amt of experience on this type of stuff.
- brianwawok 11y ago
  So like Uber but with lower fees? Uber is losing hundreds of millions of dollars with "high" fees. So I guess you need an investment of 20 billion or so to compete?
  - rockarage 11y ago
    Yes lower fees for drivers and passengers. Uber is wasting too much money on shtick marketing, too many managers & executives and expanding to other countries with anticompetitive laws. My approach will involve a relatively smaller operating team. We will not need 20 billion to compete directly with Uber, because our goals are different from Uber. Having Uber as a competitor provides a clear contrast for potential drivers and customers. Easier to compete when you are lean & understand the market.
tyingq 11y ago
I bet that Lyft and Uber would greatly reduce the contention with their drivers if they changed the app so that riders could optionally tip the driver. I'm sure that enabling tips would create other issues, but the bump in compensation would probably go a long way toward improving the relationship.
- pbreit 11y ago
  Lyft offers in-app tipping. Uber inexplicably does not.
  - tyingq 11y ago
    Ahh. Wasn't aware of that. I found a screenshot, and it's an odd, non-obvious way to allow tipping: http://www.sarahdoody.com/wp-content/uploads/2014/03/lyft-ux.png http://www.sarahdoody.com/wp-content/uploads/2014/03/lyft-ux... I wonder how much that keeps it from being used.
    - rigden33 11y ago
      That's actually not what the tipping screen looks like now. Here's what it's looked like since 2014 http://thehub.lyft.com/blog/2014/10/13/revamped-pay-screen http://thehub.lyft.com/blog/2014/10/13/revamped-pay-screen
    - deleted 11y ago
      [deleted]
  - tlrobinson 11y ago
    1. The absence of tipping is a feature. Uber was originally a premium service. Many premium services explicitly discourage tipping. 2. Driver ratings replace the primary function of tipping, which is to incentivize good service and leave feedback. That said, I very occasionally leave a tip in extraordinary circumstances, and would not be opposed to a way to do that in-app, as long as it was very clear it's not expected (hide behind 5-star rating, call it a "bonus" or something).
Apocryphon 11y ago
One wonders that if the American health system had a public option- never mind single-payer- it would relieve a lot of stress on startups. Higher taxes are one thing, but if the American government ran essential benefits such as this, businesses can then focus on, well, their businesses.
- trustfundbaby 11y ago
  ... and democrats have been making that exact argument for donkey years.
  - Apocryphon 11y ago
    So is it a valid claim, or not? Aside from the higher taxes to support a new program (not that the gov't doesn't already spend huge amounts in healthcare already) and the insurance industry, who loses out?
    - trustfundbaby 11y ago
      Yes absolutely. Its just that in the USA this debate has taken on a religious tenor to where facts and logic essentially mean nothing. It just comes down to who can yell the loudest or push their legislation through
bsbechtel 11y ago
Does anyone know if the terms of the settlement agreement are public record anywhere?

28 points by ndirish1842 11y ago

Laaw 11y ago

It'd be pretty damn cool if Lyft/Uber/Instacart/etc. could find a way to give their drivers benefits. I hope this ends up in Lyft doing more than just "looking into" those things. There's got to be a way to do this such that drivers don't get shafted, while still making a profit...

hkmurakami 11y ago
Someone's gotta pay. Right now it's the drivers paying via not having benefits. We can have a world where (1) costs are transferred to riders, (2) costs are eaten by Lyft, (3) costs are diffused through increased efficiency and utilization of the workforce -- this tends to manifest itself in overworking of employees though (ex: paying overtime rather than hiring more workers, as is often the case in manufacturing) I suppose that we could have a scenario for (3) where the goodwill entices riders to use Lyft more, which increases utilization of drivers (ex: collecting fares for X minutes / hour goes to X + N minutes / hour) and that can pay for the increased costs.
- ProAm 11y ago
  > Someone's gotta pay. Right now it's the drivers paying via not having benefits. As a contractor you always pay for your own benefits. Every contractor does this (or chooses not to on their on volition). Every driver KNOWS they are a contractor, they should know what comes with being one, and it's no ones fault but their own if they don't.
- st3v3r 11y ago
  Why should it ever have been an option for the drivers to be the ones paying?
rqebmm 11y ago
They're not incentivized because in the next 5-15 years they're going to be operating fleets of self-driving cars. They just need to float til then with whatever is the cheapest option.

revelation 11y ago

What stops new drivers from filing the same lawsuit? What if they don't settle and force the issue after Lyft has already previously agreed to a settlement?

bsbechtel 11y ago
I don't know with 100% certainty, but I am guessing rules for class action suits state that once an agreement is reached, the 'class' bringing the suit (i.e., the drivers in this case) cannot sue again for the same reason. That is, because new drivers would be a part of the same 'class' as the previous class action suit, they have technically agreed to the previous agreement, whether or not one individual driver agrees.
- tyingq 11y ago
  If you received a notice, and opted out, or were not sent a notice...then you aren't part of the "class". The notice has to have an opt out procedure. Edit: If either of the above applies, you are free to bring your own suit.
- CPLX 11y ago
  This is broadly correct. The part that preserves the rights of prospective plaintiffs to sue individually is contained in the opt-out provisions that are always a part of a class action, and involve notice and deadline requirements.
  - revelation 11y ago
    Hence why I qualified "new drivers". Obviously new drivers (after the settlement) can not have opted out or been part of the class.
- st3v3r 11y ago
  Wouldn't that only be if Lyft doesn't continue doing the same thing?
- DrScump 11y ago

mc32 11y ago

These lawsuits expose a couple of things, one there needs to be more kinds of work classifications than employee and contractor. Two, the benefits system, healthcare, whatever, is still not fixed and has a long way to go to cover all citizens, regardless of employment type and status. Another thing, is these platforms have more than one kind of participant, ones who utilize them as their main source of income, and those who utilize them as complementary source of income or as a part time/college/uni job. If these platforms would simply be a platform (who like yelp) let the provider sink or swim based on ratings, then they could avoid the problems stemming from their requirements [which makes the platform less ad hoc and more rule based thus leaning toward employee - yet the fear would be a degradation in service to end users and thus a threat to platform viability] One thing I'd like to know is whether people doing lyft or über full time do on average better or worse than their yellowcab counterpart.

tyingq 11y ago
Uber and Lyft get out of more than just paying benefits by classifying their workers as independent contractors. They also avoid paying their portion of the payroll taxes, liability for workman's comp, protective laws (minimum wage, unemployment coverage, for example). Edit: For those downvoting...you really think these exact things weren't discussed when Uber & Lyft were deciding how they would comp drivers? Heh.
- tzier 11y ago
  Portion of payroll taxes is ~7.5%, plus an extra 2.5-10% for workers comp/etc depending on your rates. If they had to reclass as employees, they would just raise prices to end consumer 10-20% to compensate (or fund it via other's money like they're doing now to price out rest of market). They'd also put a cap on hours per week so drivers couldn't drive more than 30 hours per week. Companies aren't legally required to give benefits to part-time workers (up to 30 hours). The big draw of independent contractors is that you've just converted labor from a fixed cost to a variable cost. There are tons of Uber/Lyft drivers (namely, anyone not doing it full-time, which is the majority of drivers) who prefer this since they can drive as much or as little as they want.

rockarage 11y ago

Lyft is an inadequate competitor to Uber. You can't compete with Uber if you have a very similar business plan, a plan that involves taking too much money from drivers. The problem with all these platforms is that they believe they have to become fat middle men to satisfy their investors. I'm working on a platform that will exploit this inefficiency in the market.

Everhusk 11y ago
Curious about what you're working on... hit me up (link in my profile) if you want to chat. I'm working on something similar.
- rockarage 11y ago
  This is the reason for my comment, looking for like minded individuals & teams.
  - joshjkim 11y ago
    same here - e-mail in my profile. i have a good amt of experience on this type of stuff.
brianwawok 11y ago
So like Uber but with lower fees? Uber is losing hundreds of millions of dollars with "high" fees. So I guess you need an investment of 20 billion or so to compete?
- rockarage 11y ago
  Yes lower fees for drivers and passengers. Uber is wasting too much money on shtick marketing, too many managers & executives and expanding to other countries with anticompetitive laws. My approach will involve a relatively smaller operating team. We will not need 20 billion to compete directly with Uber, because our goals are different from Uber. Having Uber as a competitor provides a clear contrast for potential drivers and customers. Easier to compete when you are lean & understand the market.

tyingq 11y ago

I bet that Lyft and Uber would greatly reduce the contention with their drivers if they changed the app so that riders could optionally tip the driver. I'm sure that enabling tips would create other issues, but the bump in compensation would probably go a long way toward improving the relationship.

pbreit 11y ago
Lyft offers in-app tipping. Uber inexplicably does not.
- tyingq 11y ago
  Ahh. Wasn't aware of that. I found a screenshot, and it's an odd, non-obvious way to allow tipping: http://www.sarahdoody.com/wp-content/uploads/2014/03/lyft-ux.png http://www.sarahdoody.com/wp-content/uploads/2014/03/lyft-ux... I wonder how much that keeps it from being used.
  - rigden33 11y ago
    That's actually not what the tipping screen looks like now. Here's what it's looked like since 2014 http://thehub.lyft.com/blog/2014/10/13/revamped-pay-screen http://thehub.lyft.com/blog/2014/10/13/revamped-pay-screen
  - deleted 11y ago
    [deleted]
- tlrobinson 11y ago
  1. The absence of tipping is a feature. Uber was originally a premium service. Many premium services explicitly discourage tipping. 2. Driver ratings replace the primary function of tipping, which is to incentivize good service and leave feedback. That said, I very occasionally leave a tip in extraordinary circumstances, and would not be opposed to a way to do that in-app, as long as it was very clear it's not expected (hide behind 5-star rating, call it a "bonus" or something).

Apocryphon 11y ago

One wonders that if the American health system had a public option- never mind single-payer- it would relieve a lot of stress on startups. Higher taxes are one thing, but if the American government ran essential benefits such as this, businesses can then focus on, well, their businesses.

trustfundbaby 11y ago
... and democrats have been making that exact argument for donkey years.
- Apocryphon 11y ago
  So is it a valid claim, or not? Aside from the higher taxes to support a new program (not that the gov't doesn't already spend huge amounts in healthcare already) and the insurance industry, who loses out?
  - trustfundbaby 11y ago
    Yes absolutely. Its just that in the USA this debate has taken on a religious tenor to where facts and logic essentially mean nothing. It just comes down to who can yell the loudest or push their legislation through

bsbechtel 11y ago

Does anyone know if the terms of the settlement agreement are public record anywhere?