Lawsuit: Slow background checks cheated Lyft drivers out of bonuses

A Lyft car drives crosses Market Street in San Francisco. Lyft is being sued by two drivers alleging fraud and breach of contract.
(Jeff Chiu / Associated Press)

Lyft drivers who say they were cheated out of thousands of dollars in sign-up bonuses have filed a federal class-action lawsuit that accuses the ride-hailing company of breach of contract and fraud.

In a 22-page complaint filed this week in the U.S. District Court for Northern California, two drivers from Los Angeles and San Diego say they were cheated out of $1,000 bonuses promised in February as a reward for finding new drivers for the ride-finding service that users can access through their smartphones.

The lawsuit is the latest in a wave of legal challenges in the ride-hailing industry as it continues its rapid global expansion. Uber is facing a lawsuit from the top prosecutors of Los Angeles and San Francisco, who say the company has misled consumers. And this week, federal judges ordered jury trials for class-action lawsuits alleging that Uber and Lyft drivers should be employees, rather than contractors.

As demand for the service surged, the new lawsuit said, Lyft told drivers in 15 U.S. cities that they would receive a $1,000 bonus for each new driver they recruited who began by March 5. New drivers were also promised $1,000.

The “Double-Sided Referral Bonus” and "$1,000 Sign-On Bonus” kicked off the biggest wave of applicants in Lyft’s three-year history, according to the lawsuit. The company shut off applications within days.


Applicants had been told that background checks would take “a couple of days” to complete, the lawsuit said. But after the application deadline, Lyft sent out an email telling recruiters and applicants that they might not qualify for the $1,000 bonus if their background checks weren’t completed by March 5.

“Some of these steps ... are outside our control and can vary in length for different applicants,” Lyft said in the email, according to the lawsuit. “It is possible that you won’t qualify for the promotion if all steps aren’t completed by the deadline.”

Plaintiff Jonathan Wright of Los Angeles applied to drive for Lyft on Feb. 27 after seeing the sign-on bonus promotion, the lawsuit said. On the day before the deadline, Lyft’s “third-party vendor” told Wright that his application would not be completed by March 5, but that only Lyft could request that it be expedited.

The other named plaintiff, Casey Loewen of San Diego, has driven for Lyft for a year and a half. He referred someone to drive for Lyft after learning of the promotion, the lawsuit said, but the applicant’s background check was not completed in time.

Many in the Lyft community believed “the entire promotion had been a scam to attract new drivers without having to pay them $1,000,” the lawsuit said.

The plaintiffs are seeking unspecified punitive damages.

Lyft did respond to a request for comment.

For more Los Angeles transportation news, follow @laura_nelson on Twitter.