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Lyft Settles Calif. Drivers' Premium Fare Suit For $1.95M

Law360—RJ Vogt

Lyft Inc. drivers in California suing the ride-sharing app for allegedly taking a cut out of their “prime time premium” surcharges told a federal court Wednesday that the company has agreed to pay $1.95 million to a class of nearly 246,000 drivers.

The settlement class comprises all those who gave at least one ride in California at peak busy times from August 2014 to April 2017, when the app had allegedly incentivized drivers to drive prime-time hours by telling customers the premium “goes entirely to your driver” while still taking a commission on the surcharge.

Wednesday’s motion for preliminary approval of the deal noted that in April 2017, Lyft stopped using the language the drivers had focused on as the foundation of their prime-time-premium claims.

The parties have settled all claims relating to [Lyft’s] alleged withholding of ‘prime time premium’ payments to [class members],” the filing said. “The non-prime time premium related claims such as mileage reimbursement, overtime pay, minimum wage, and meal and rest breaks claims … will be dismissed without prejudice.”

The suit, brought by plaintiffs Alex Zamora and Rayshon Clark, has its roots in a separate class action filed in September 2013 known as Cotter v. Lyft Inc., which alleged Lyft drivers were misclassified as independent contractors.

Zamora and Clark’s lawsuit launched in May 2016, the same day Lyft agreed to a $27 million settlement in the Cotter case. The pair asked to intervene in that case a few days later, arguing the deal would jeopardize their own suit by releasing the prime-time-premium claims without relief.

In June, U.S. District Judge Vince Chhabria denied their motion, saying Zamora and Clark could either file a formal objection in the Cotter case or opt out of the settlement and pursue their claims separately through their own lawsuit. The drivers opted to file an amended complaint in July 2016.

Lyft asked to dismiss Zamora and Clark’s case in early September 2016, saying the pair merely used the case as a “bargaining chip” to receive a bigger cut of the Cotter settlement.

But the drivers denied Lyft’s assertions later that month, saying their suit brought allegations not addressed by the Cotter suit, especially concerning the prime-time-premium surcharge.

After Judge Chhabria kept the suit alive in November 2016, Lyft moved for arbitration and to strike the nationwide claims. The drivers agreed to limit the proposed class to drivers in California in December.

A court filing from January stipulated that the two sides had reached an agreement in principle to settle the dispute and noted Lyft’s bid for arbitration was being withdrawn without prejudice.

Wednesday’s filing said the parties conducted arm’s-length negotiations to reach the settlement that provides $10,000 for each named plaintiff as well as up to $650,000 for class counsel. To receive a settlement payment, class members must submit a claim form and calculate the number of unrefunded commissions on prime-time rides they are eligible to receive back.

Counsel for either side did not immediately respond to a request for comment Thursday.

The drivers are represented by Jahan C. Sagafi, Relic Sun, Rachel Bien and Michael J. Scimone of Outten & Golden LLP.
   

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The case is Zamora et al. v. Lyft Inc., case number 3:16-cv-02558, in the U.S. District Court for the Northern District of California.