Lyft sued over financial promotions for new drivers, referrals

By Shaun Zinck | Mar 24, 2015


A popular ride service is being sued over allegations that it didn't fulfill its obligations when offering financial promotions for its drivers and would-be drivers.

Casey Loewen and Jonathan Wright filed the lawsuit on March 11 against Lyft, Inc., alleging the business offered two different promotions of $1,000 each, but didn't complete background checks of potential drivers fast enough to award the money.

Lyft offers rides to customers through its online mobile application. Customers use the app to request a ride from a Lyft driver, and the driver then accepts the rider and takes the person where they would like to go. Toward the end of February, Lyft offered current drivers $1,000 if they referred a friend to become a driver.

The company also offered new drivers $1,000 if they signed up and passed a background check. Both promotions said the new drivers would need to complete their first drive by March 5 to receive the money. A couple of days after the company offered the promotions, it sent an email that it was stopping the offer in several cities due to thousands of new applications.

The lawsuit alleges those who applied should still be eligible for the $1,000 bonus if the first ride was completed by March 5, but that the company didn't perform “timely" background checks so that drivers would be eligible to provide their first ride by the cutoff date.

“Indeed, despite the fact that Lyft stated that it would only take a 'couple days' to approve a background check, many new drivers were told by Lyft and its third-party vendor that it would take at least one to two weeks for their background check to be approved,” the lawsuit said.

The lawsuit seeks class status and more than $5 million in damages, plus court costs. The plaintiffs are represented by R. Rex Parris, Alexander Wheeler, Kitty Szeto and John Bickford of R. Rex Parris Law Firm in Lancaster, California, and Daniel Carpio and Michael Turner of Dunn & Associations in Santa Monica.

United States District Court, Northern District of California, case No. 3:15-cv-01159.

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