Uber and Lyft drivers haven’t had much luck in the courts. In fact, for most drivers, the courthouse door isn’t even open. A recent court case involving Lyft highlights the problems ride share drivers have in their quest for justice.
This week a Lyft driver’s class action lawsuit was tossed from court and sent to arbitration. Both Lyft and Uber use a mandatory arbitration clause in their driver’s agreement. Those provisions say that all disputes must be resolved through private arbitration instead of the courts. These same agreements usually also prohibit class actions.
Class actions are important in smaller dollar cases. The typical Uber or Lyft driver can’t find a lawyer willing to take a single case over unpaid tips or no overtime. The legal fees would exclude the value of the claim. Without a lawyer, drivers are at a distinct disadvantage and Lyft knows it.
The two ride giants also know there is strength in numbers so they force drivers to fight their battles solo. In a class action, a single lawyer or law firm can represent hundreds or thousands of people if they all suffer from the same issue. When the employer insists on a class action and lawsuit waiver, that means most drivers are forced to fight alone and without the benefit of a lawyer.
Lyft Driver Pete Peterson Sues After Being Blocked from App
Pete Peterson signed up to drive for Lyft in December of 2014. To become a driver, an applicant must download and accept the company’s terms of service. Included in Lyft’s terms is a provision that says drivers must arbitrate disputes and can’t participate in class action lawsuits.
Lyft’s agreement said,
You and We agree that any legal disputes or claims arising out of or related to the Agreement (including but not limited to the use of the Lyft Platform and/or the Services, or the interpretation, enforceability, revocability, or validity of the Agreement, or the arbitrability of any dispute), that cannot be resolved informally shall be submitted to binding arbitration in the state in which the Agreement was performed. The arbitration shall be conducted by the American Arbitration Association under its Commercial Arbitration Rules (a copy of which can be obtained here), or as otherwise mutually agreed by you and we. Any judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Claims shall be brought within the time required by applicable law. You and we agree that any claim, action or proceeding arising out of or related to the Agreement must be brought in your individual capacity, and not as a plaintiff or class member in any purported class, collective, or representative proceeding. The arbitrator may not consolidate more than one person’s claims, and may not otherwise preside over any form of a representative, collective, or class proceeding. YOU ACKNOWLEDGE AND AGREE THAT YOU AND LYFT ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS ACTION OR REPRESENTATIVE PROCEEDING.
Like Uber, Lyft uses an outside vendor to perform background checks. The report on his background was prepared by Sterling Infosystems. It said he was “ineligible”. He was not provided a copy of the report or informed of his rights under the Fair Credit Reporting Act (FCRA).
Peterson patiently waited another year, reapplied and was again denied and not provided a copy of the report or told of his rights under the FCRA.
The Fair Credit Reporting Act says that if an employer takes an “adverse action” on a job application “based in whole or in part” on information obtained from a consumer report, the employer must inform the applicant of that fact. The employer must also a copy of the consumer report and a notice of the applicant’s dispute rights under the FCRA. According to Peterson, Lyft did none of these things.
Five months later – after waiting almost 18 months – Peterson saw the report and disputed its findings. Not getting any relief, he filed a class action lawsuit for himself and on behalf of all other Lyft drivers that were improperly rejected because of a faulty background check.
Lyft asked the court to dismiss the lawsuit. The company argued that by clicking the “accept” button on the driver’s agreement, Peterson had waived his right to sue and also waived his right to participate in a class action. Unfortunately, the court agreed.
We have seen courts across the United States, including in our own ride share driver class actions, toss drivers lawsuits because of the waiver provisions of the driver’s agreements. Although we believe that all people have a Constitutional right to seek redress from the courts, most judges and Congress say that people can waive those rights. By clicking on the “accept” box on the Lyft and Uber driver application, you give up your rights.
Until Congress changes the laws, Lyft drivers have a very uphill battle.
[Mahany Law brought several class actions on behalf of Uber drivers, the courts ruled in favor of Uber in each one. For updates, see our Lyft – Uber driver lawsuit page. We are no longer accepting Uber and Lyft cases but continue to update our site as a courtesy to drivers across the United States. We are still interested in foreign official bribery cases. If you have information about a ride share company bribing foreign government officials, contact us by email or by phone at 800.669.7782. All inquiries are kept confidential.]