Rideshare Operators Are Having Legal Issues

rideshareLyft, Uber, and other rideshare operations have snagged customers from the taxi industry, leaving cab drivers unsettled and anxious about the future of the taxi business. It seems rideshares have upended the transportation industry, netting billions of dollars. But not everything has been coming up roses in the rideshare business. If you drive a cab and believe you have a legal claim against a rideshare company, consulting with an employment attorney might be advisable.

Legal Issues

Believe it or not, despite the huge earnings of rideshare apps, taxi drivers and others have begun to call attention to some serious concerns with the new system, and as a result, these new companies are facing real legal problems:

  • Regulations that differ from city to city: Taxi companies are quick to note that rideshare drivers are not held to the same standards as cab drivers. Some localities have responded by filing lawsuits alleging deceptive and unfair business practices because rideshare drivers do not adhere to the same regulations as cabbies. In some cases, the regulations of note regard commercial drivers license rules, car inspection expectations, insurance laws, licensing fees, and uniform rates.
  • Airports are losing money on fees and permits in some cities: Airports typically collect revenue through permitting, and some airports are now banning rideshares. In San Francisco, in fact, airport officials were even arresting rideshare drivers for trespassing. It is looking like regulation is going to have to come down quickly in order to avoid more of this type of issue.
  • Insurance is not always verifiable: Despite claims of million-dollar liability policies, several states have warned passengers that they may not be covered in the event of an accident.  Instances involving limited coverage have occurred here in California.
  • Company cars do not necessarily meet ADA standards: When the vehicle you call up on your app is not wheelchair friendly, it can be a real problem. Disabled patrons are denied service because they offer no alternatives for mobility-impaired persons. That means they are not meeting the guidelines established in the Americans with Disabilities Act.
  • Drivers with criminal backgrounds slip through the cracks: In California, over 20 rideshare drivers with felony backgrounds that were quite serious were discovered on the road in 2016.  That led to stricter rules regarding background checks, with heftier fines for companies that hire sex offenders and violent felons or terrorists.

Rideshare Taking Unfair Advantage

The rideshare market is increasing globally, largely because the supply of drivers is endless, since virtually anyone can become a rideshare driver. That fact, combined with unfair regulation discrepancies compared to cab companies, has created a disparity that has left cab drivers wanting more of the transportation pie. [Read more…]

Employee or Independent Contractor – Lyft Driver Dispute

employee or independent contractorAm I an employee or independent contractor? Ridesharing company Lyft has reached a settlement agreement with California drivers who filed a lawsuit regarding their classification as independent contractors, rather than employees. The settlement requires Lyft to pay the drivers $12.25 million, but does not require the company to reclassify them as employees.

The case was filed in 2013 in the U.S. District Court for Northern California by a Lyft driver named Patrick Cotter, who claimed a variety of allegations related to wages and expenses. One of their complaints was that, because Lyft classifies its drivers as independent contractors, the drivers were required to pay for expenses such as gas and auto insurance. Cotter initially filed the lawsuit on behalf of himself and Lyft drivers nationwide, but amended the complaint to include only California drivers after the Court ruled that drivers outside of California did not have a cause of action.

The Settlement

After participating in mediation sessions, the parties agreed to a settlement. The settlement includes a $12.25 million payout which (if approved by the court) will be divided among the class of plaintiffs. The settlement also contains the following provisions:

  • Lyft will only “deactivate” drivers for specific reasons, rather than being able to deactivate them at will.
  • Before drivers are deactivated, Lyft will allow the drivers to address the concerns about their performance.
  • If a driver decides to go to arbitration to challenge his or her deactivation, or to address a compensation issue, Lyft will pay his or her arbitration expenses. (Lyft uses an arbitration clause in its contracts, but these clauses did not keep this case out of court.)
  • Lyft will create an option referred to in the settlement as “favorite driver,” which allows passengers to choose drivers who will receive unspecified benefits.
  • Lyft drivers will be given access to information about potential passengers via their smartphones, before deciding whether or not to accept the passengers’ ride requests.

The settlement does not, however, establish the drivers as employees. It contains language asserting that Lyft denies that any member of the settlement class is an employee, that Lyft denies any wrongdoing, and that Lyft denies that any of the plaintiffs’ claims are valid.

The settlement has no bearing on a similar lawsuit filed against Uber by its drivers, which is on course to head to federal court in June.

Employee or Independent Contractor – The Legal Landscape

Employment lawyers, business owners, and employees around the country were watching this lawsuit, hoping that a ruling might provide some guidance on how courts will handle similar cases. The issues brought up in this case regarding the line between employees and independent contractors are relevant not only to transportation companies, but to participants in the “on-demand” economy at large. [Read more…]

Disclaimer

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