BUSINESS

Lyft Sued For Millions For Allegedly Overcharging New Yorkers

It's just the latest trouble for the pink-mustachioed Uber rival.
Maya Jackson, a Lyft driver from Sacramento, holds a Lyft Glowstache in San Francisco, California February 3, 2016.
Maya Jackson, a Lyft driver from Sacramento, holds a Lyft Glowstache in San Francisco, California February 3, 2016.

A potential class-action lawsuit filed earlier this week in New York City claims Lyft has regularly overcharged riders for tolls there and seeks nearly $60 million in damages.

In court documents submitted to the U.S. District Court for the Southern District of New York, attorneys Neal Bhushan and Kevin Caldwell argue the ride-hailing service made a habit of charging passengers the higher “cash” rate for tolls in the city instead of the lower “EZ Pass” rate, which the New York Taxi & Limousine Commission mandates should be charged.

And at an average of about $2.46 more per toll, multiplied by thousands of rides per day, it isn’t exactly small change. The complaint estimates that small discrepancy adds up to almost $60 million in overcharges over the past two years.

Of that, 20 percent of the overcharges would have been gone to Lyft itself, with drivers receiving the remaining 80 percent.

It’s unclear how frequently the overcharges occurred and whether Lyft intentionally engaged in the practice. Lyft declined to comment to The Huffington Post, and the attorneys who filed the suit said they weren’t able to speak in more detail at this time.

“I cannot speak to the specifics of the nature of the lawsuit without further discovery,” said Bhushan, of the Jacob Fuchsberg Law Firm, “but I do believe this is the first lawsuit brought on behalf of consumers in New York against a company like Uber or Lyft. Most of the cases brought against these companies have been on behalf of drivers.”

“A tech company like Lyft can’t just come into our city and overcharge riders,” Caldwell added. “Excessive fees ripping off passengers is simply unacceptable.” 

The suit comes during an interesting time for the company, and an increasingly tumultuous period for ride-hailing in general. While Lyft looks to play catch-up to rival Uber, it’s been rumored to be entertaining offers from potential buyers. Meanwhile, Uber has ceded its operation in China to rival Didi after taking on heavy losses there, a move that undercuts Lyft, which had a partnership with Didi.

UPDATE: Sept. 22 ― A proposed update to Lyft’s terms of service, set to go into effect Sept. 30, now clarifies the company’s relationship with drivers and the tolls they collect. A new clause reads, in part:

We do not guarantee that the amount charged by Lyft will match the toll charged to the Driver, if any. The amount of collected tolls (and return tolls) will be passed in their entirety to the Driver who provided your ride.

Read the full complaint below:

HuffPost

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