Lyft to Pay $2 Million to Squash Peak Fare Case

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Chris Opfer

Lyft Inc. has agreed to pay $2 million to drivers in California claiming the ride-sharing company lied about pocketing extra fees charged to customers during busy periods, according to a court document filed late March 28.

Lawyers for the drivers say Lyft told customers that all “Prime Time” premiums tacked onto fares during high-volume hours go to drivers, but kept 20 percent for the company. Lyft agreed to stop making those statements as part of the settlement, which must be approved by a federal judge in San Francisco.

“We’re very pleased that Lyft is compensating drivers for these claims, and that it stopped using the ‘for the driver’ language we challenged as deceptive,” Jahan Sagafi, a lawyer for the drivers told Bloomberg Law.

A Lyft representative didn’t immediately respond to Bloomberg Law’s request for comment.

The move comes months after Uber agreed to pay $3 million to a group of ride-share drivers in New York who said the company docked excessive fees from their paychecks. Uber and Lyft take a portion of the fare paid for each customer they link with participating drivers through the companies’ platforms.

The rideshare companies have also been involved in high-profile legal battles over their classification of drivers as independent contractors rather than employees. Contractors generally are not covered by minimum wage and overtime laws, don’t get workers’ compensation and unemployment benefits, and arguably can’t unionize. They’re treated as independent business owners, including by being able to write off certain expenses for tax purposes.

Lyft agreed to pay $27 million last year to avoid having a judge decide whether drivers should be classified employees.

The latest settlement would resolve a nearly two-year court battle originally involving possible claims for drivers across the country. Lyft doesn’t admit any wrongdoing as part of the agreement.

The case is Zamora v. Lyft, N.D. Cal., No. 3:16-cv-02558, motion for preliminary settlement approval 3/28/18.

Request Labor & Employment on Bloomberg Law