Question

Lyft is a San Francisco-based ride-sharing business. Through its "Lyft Platform" mobile application, Lyft allows someone looking for auto transportation to request a ride. All people registered with the app as "drivers" who are nearby the requesting party's location at the time are notified through the app of the request. The first driver to accept the request is matched with the requesting party and proceeds to pick up the requesting party and drive him/her to the requested destination.

People who sign up as Drivers provide their availability to Lyft through the app; Drivers are expected to accept all incoming requests during that available time unless already fulfilling another rider's request. Lyft prohibits Drivers from transporting riders more than 60 miles from the origin of the ride. Riders pay a fee for the ride to Lyft directly through their credit card; Riders may choose to provide a tip to the Driver, which is processed through the Lyft app. Lyfttakes 20% of all gratuity payments as an administrative fee, and Drivers are not permitted to ask for such payments. Pursuant to Lyft's Terms of Service, Lyftis permitted to terminate Drivers for any reason and at any time; Lyft Drivers are required to place a large pink mustache on the front of their vehicles when transporting a rider; Drivers are not permitted to speak with Riders about Lyft fees or to set their own rates; Drivers go through a 1 hour training course; and Lyft reserves the right to examine Drivers' vehicles for cleanliness and appearance.

Based on what we learned in these chapters, what possible legal risks does Lyft have through this relationship? Can you make an argument that Lyft Drivers are "employees" of Lyft? This issue has been litigated in a few courts, so you are welcome to look up recent news articles or read the court opinions (because you know how to do that now!); please still try to relate back to the basics of this week's reading or lecture, and definitely cite all sources used.

Answer 1

Lyft runs the risk of being sued by some of the drivers who might claim some of the benefits available to the employees of the company, not the independant contractors as the company classifies them, on the basis of the work relationship it shares with them.

The relationship of the drivers with Lyft is more of an employee - employer relationship on following grounds.

(a) The drivers do the core business of the company, not a subsidiary business for which they are engaged.

(b) They have to make necessary modifications to their vehicles and comply with regulations of the company.

(c) Occupation of the workers and the employer is the same.

(d) The workers have no opportunity in profit and loss.

(e) Length of the services performed is decided by the company.

(f) No special skills needed by the drivers

(g) Degree of supervision and control on the drivers from the company is high. It rates the drivers, monitors them, inspects their vehicles and terminates those whose conduct is found unsatisfactory.

(f) Length of the association with the employer is in continuation.

Reference : https://www.nolo.com/legal-encyclopedia/california-labor-commissioner-rules-uber-driver-employee-not-independent-contractor.html