Lyft’s recent public relations mess over signup bonuses might make its way to a courtroom.
On Wednesday, Southern California Lyft drivers filed a complaint against the San Francisco-based ride-hail service on behalf of drivers nationwide who say they were promised $1,000 bonuses if they recommended new drivers, only to have the offer rescinded by the company. The complaint is a precursor to a possible class-action lawsuit.
“It’s almost become a way of doing business, to cheat consumers and hard-working people of not a huge amount” of money, said Rex Parris, an attorney in Lancaster who is representing the Lyft drivers. “But when you add it up from the company’s point of view, it’s astronomical.”
Lyft did not respond to requests for comment Friday.
The dispute arises from bonuses Lyft offered for new drivers and the existing drivers who recommended them. The company claimed the promotion was too popular, resulting in an onslaught of new signups. Lyft’s offers were two fold: one “split referral” bonus, where a current Lyft driver could refer a friend to work for the company and they would split $2,000; and a $1,000 sign-on bonus just for new drivers without a referral.
The promotion took place in San Francisco and many other major U.S. cities where Lyft does business.
To sign up for Lyft, drivers had to fill out an application, take a “welcome ride” with a Lyft-assigned mentor and pass a background check, according to the complaint. Once that process is finished, drivers can begin working.
However, in order to be eligible for the promotion, and the $1,000, new drivers were required to take their first passenger on or before March 5. Because of the demand, that was not going to happen for many applicants.
“It’ll take a couple days for us to run your friend’s background check,” Lyft wrote at the bottom of an email to drivers, touting its promotion. But some drivers waited much longer for their background checks to be completed, the complaint alleges, and some never received background checks at all.
Lyft said the promotion attracted thousands of new drivers, enough to prompt the company to cancel the deal.
Drivers were notably miffed. They are mainly seeking direct recompense, said attorney Parris.
“Right now we’re seeking $1,000, but as we get further into the lawsuit that’ll change, with damages and fraud,” he told The San Francisco Examiner on Friday. “The baseline is the thousand dollars.”
After the deal was canceled, Lyft co-founder John Zimmer wrote an apology email to drivers.
“Lyft learned a lesson this week, and we’re sorry for the frustration it caused you,” he wrote, saying the company would extend driving deadlines to March 12.
Parris said “something like this is pretty cut and dried,” and thought the lawsuit would come to trial within two years.
“There’s not a lot of controversial facts in it,” Parris said. “They either did or didn’t do it, and this is how many people were affected by it.”
In a website for ride-hail service drivers, UberPeople.net, a post specifically for Lyft drivers on the referral program highlighted drivers’ frustrations.
“I can see it coming already,” wrote a driver from San Diego. “Many angry drivers asking about this promo…I think this is going to be a big blunder for Lyft. Whoever started this did not think it through well.”