TLDR:
- Lyft announced measures to improve driver pay and introduce new tools
- Supreme Court denied Uber and Lyft’s appeal against California labor lawsuits
- California officials can pursue claims despite drivers’ arbitration agreements
- The lawsuits allege misclassification of drivers as independent contractors
- Uber and Lyft maintain that drivers benefit from contractor status flexibility
In recent developments, the ride-hailing industry has seen significant shifts in both legal and operational landscapes. Lyft, one of the major players in the market, has announced new measures aimed at improving driver earnings and experiences.
Meanwhile, Uber and Lyft have faced a setback in their legal battle against California labor lawsuits.
Lyft’s new initiatives include increased pay for drivers who go out of their way for rides and for trips that take at least five minutes longer than estimated.
The company is also rolling out new tools such as an earnings dashboard and a “preferred drivers” system that will give certain drivers more ride requests. Additionally, Lyft is introducing a feature that matches electric vehicle drivers with rides that fall within their battery range.
Jeremy Bird, Executive Vice President of driver experience at Lyft, stated,
“We have about 1.3 million or so drivers over the last year that have been on the platform. We’ve seen pretty tremendous growth year over year … Our goal is to continue to grow that.”
The company reported that in the three months ending in June, it saw the highest number of new drivers in any quarter since 2019, including a 34% increase in women and non-binary drivers compared to the same period last year.
While Lyft focuses on improving driver conditions, both Uber and Lyft have encountered legal challenges. The U.S. Supreme Court recently declined to hear an appeal from the companies against lawsuits filed by the state of California.
These lawsuits, initiated in 2020 by California Attorney General Rob Bonta and Labor Commissioner Lilia Garcia-Brower, seek back payments for withheld minimum wage, overtime, and other benefits.
The companies had argued that the lawsuits were invalid because drivers had signed arbitration agreements.
However, California Appeals Court Justice Jon Streeter ruled last September that state officials were enforcing labor laws and not suing on behalf of individual workers, making the arbitration agreements irrelevant to the state’s authority.
This decision allows California to pursue claims that Uber and Lyft owe money to drivers who were allegedly misclassified as independent contractors rather than employees. The ruling has significant implications for the gig economy, as it challenges the companies’ business models that rely heavily on contractor classification.
The legal dispute highlights the ongoing debate about worker classification in the gig economy. While Uber and Lyft maintain that drivers benefit from the flexibility of contractor status, critics argue that this classification deprives workers of essential protections and benefits.
In November 2020, California voters approved Proposition 22, which allows ride-hailing companies to continue classifying drivers as independent contractors. However, the current lawsuits were filed before this ballot measure was passed.
The Supreme Court’s decision not to hear the companies’ appeal means that the lower court’s ruling stands, allowing the California lawsuits to proceed. This development could potentially lead to similar actions in other states and further scrutiny of gig economy labor practices.
Uber and Lyft recently agreed to adopt a $32.50 hourly minimum pay standard for Massachusetts drivers and pay $175 million to settle a lawsuit alleging improper treatment of drivers as independent contractors.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support