Haider v. Lyft, Inc.

Background

Lyft sought to compel arbitration of claims that it unlawfully deducted New York City sales tax and a Black Car Fund surcharge from drivers’ earnings. The opinion states that Mohammad Islam worked as a Lyft driver from November 2014 through March 2020 and agreed to Lyft’s terms of service, which required individual arbitration of disputes with Lyft. The opinion also identifies the plaintiffs in the caption as “Bigu Haider, et al.” but analyzes Islam’s work and claims in detail.

Islam said that he regularly drove passengers between New York and New Jersey and, less frequently, between New York and Connecticut. He estimated that interstate fares made up about 4% to 5% of his trips and about 20% of his earnings. He also said that approximately 25% of his trips began or ended at airports, train stations, ferry terminals, or bus terminals. Lyft’s data showed that its drivers nationally made millions of interstate trips each year and that a full-time driver took passengers across state lines about twice a week on average.

Legal question

The Federal Arbitration Act generally requires courts to enforce arbitration agreements. Section 1 of that statute, however, excludes contracts for transportation workers engaged in interstate commerce. The court, rather than an arbitrator, had to decide whether the exemption applied.

Lyft argued that the exemption covered only workers who transported goods. The court rejected that argument, explaining that the relevant law does not distinguish between transporting people and transporting goods. The court then considered whether rideshare drivers were sufficiently connected to the flow of interstate commerce.

Court’s reasoning

The court concluded that rideshare drivers in the New York metropolitan area were transportation workers engaged in interstate commerce. It relied on their regular interstate trips, Lyft’s marketing and fare schedules, and the evidence that interstate trips took a disproportionate share of drivers’ work time and earnings.

The court reached the same conclusion for rideshare drivers considered nationally. It reasoned that regular interstate trips were enough even though not every driver crossed state lines. It also held that drivers could qualify when they transported passengers to and from airports, train stations, bus terminals, and other hubs of interstate travel, because those trips helped form part of an interstate journey.

The court emphasized that its conclusion was based on the factual record then before it. It stated that Lyft could renew its motion if a more developed record showed that Islam was not part of a class of workers engaged in interstate commerce.

Disposition

The court denied Lyft’s motion insofar as it sought to compel arbitration under the Federal Arbitration Act. It did not rule in this opinion on Lyft’s request to compel arbitration under state law or on the other pending motions; it stated that those matters would be addressed by separate order.