Villaseñor V Lyft

Case 3:18-cv-02769-JCS Document 1 Filed 05/10/18 Page 1 of 21
1 PELUSO LAW GROUP, PC

2 Larry A. Peluso (SBN 281380)
14435-C Big Basin Way #289
3
Saratoga, California 95070
4 pelusolaw@gmail.com
5 949-395-0092 (direct) 310-593-1821 (office)
6 Attorneys for Plaintiff and the Plaintiff Class
7
8 UNITED STATES DISTRICT COURT
9 NORTHERN DISTRICT OF CALIFORNIA
10
11 FERNANDO VILLASEÑOR, on Case No.:
behalf of himself and all others
12 similarly situated,
PELUSO LAW GROUP, PC
CLASS ACTION
13
14 Plaintiffs, COMPLAINT FOR:
15 1. Unfair Competition in Violation

v. of California Business and
16
Professions Code §17200 et seq.
17
2. Unjust Enrichment
18 LYFT, INC., a corporation; Doe 1-5,
3. Fraudulent Inducement to
19 Defendants. Employment and to Contract,
20 and Intentional and Negligent
Misrepresentation
21
4. Constructive Trust
22
23
24
25 JURY TRIAL DEMANDED
26
27
28
1 CLASS ACTION COMPLAINT


1 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN:

2 Plaintiff Fernando Villaseñor, by and through his counsel, on information
3 and belief, alleges the following, on behalf of himself and others similarly situated.
4
5 INTRODUCTION
6 1. This is a civil class action brought by one Lyft driver on behalf of all
7 Lyft drivers, seeking disgorgement of unjust enrichment obtained by Lyft, Inc.
8 without legal entitlement, through deceptive business practices and fraud.
9
10 PARTIES
11 2. PLAINTIFF FERNANDO VILLASEÑOR is a resident of Mission
12 Viejo, Orange County, California. Villaseñor has been a Lyft Driver since October
13 2016, operating in California.

14 3. DEFENDANT LYFT, INC. is a Delaware corporation with its
15 corporate headquarters and primary place of business in San Francisco, California.
16 Lyft operates in at least 30 other states of the United States of America.
17 4. Plaintiff alleges on information and belief that: (1) each Defendant
18 acted in all matters relevant to this action as the agent of the other Defendant and
19 carried out joint business plans and operations; and (2) the acts and omissions of
20 each Defendant are legally attributable to the other Defendant.
21
22 JURISDICTION AND VENUE
23
24 Subject Matter Jurisdiction
25 5. This Court has subject matter jurisdiction over this action under the
26 Fairness in Class Actions Act of 2005 (“CAFA”), 28 U.S.C. Section 1332(d),
27 because the aggregate amount in controversy exceeds $5,000,000, the parties are
28 minimally diverse; this is not a local controversy. 28 U.S.C. §1332(d)(4)(A).


1 6. Plaintiff Fernando Villaseñor also is a resident and citizen of the State

2 of California, but the putative plaintiff class is composed of approximately
3 1,400,000 members who reside in at least 30 states of the United States of America
4 and drive for Lyft in those states.
5
Personal Jurisdiction and Venue
6
7. The United States District Court for the Northern District of
7
California has general personal jurisdiction over Defendant Lyft, Inc. because
8
Lyft’s headquarters and principal place of business is located in San Francisco,
9
California.
10
8. Having general jurisdiction over Lyft, Inc., this court has jurisdiction
11
over Lyft as to claims of Lyft drivers who reside anywhere and who drive for Lyft
12
anywhere.
13
14 GENERAL ALLEGATIONS
15 9. “Lyft” is a familiar smartphone-app driven taxi service. While
16 characterizing its drivers as independent contractors, Lyft exercises enormous
17 control over its drivers’ ‘independent’ businesses, such as instantly terminating a
18 driver’s ‘business’ at the drop of a hat.
19 10. Lyft’s smartphone app and business model are highly similar to the
20 smartphone app and business model of the earlier and highly-successful ‘ride-
21 sharing’ service, Uber.
22 11. Lyft competes with Uber in the same market; and each of these two
23 leading “transportation network companies” must compete against taxi service.
24 12. Since its 2012 launch, Lyft has enjoyed astounding growth, achieving
25 a market value of $11 billion in less than 5 years' time. Lyft’s growth rate is
26 remarkable, particularly in light of Uber’s 3-year head-start, viral growth rate, and
27 competitive pricing, designed to undercut taxi prices in all but the most extreme
28 markets, by an average of 30%.


1 13. Uber fares are so competitive with taxi fares that, in 2018,
2 competition from Uber had driven the free-market resale price of a New York City
3 Taxi Medallion (license) from a high of well over $1,000,000 in 2013 to a little
4 better than $150,000 in 2018.
5 14. In order to gain market entry against Lyft and compete with taxis, like
6 Uber, Lyft regularly set its standard prices to average about 30% below taxi prices.
7 15. As the new company in town, in order to quickly increase its market
8 share, Lyft had to attract and retain drivers, including drivers who drove for Uber
9 or had the option of driving for Uber. To attract its rapidly-growing staff, which
10 has swollen to nearly 1,000,000 drivers today, Lyft advertising conveys the
11 impression of being driver-friendly and of offering drivers a better deal. And, to a
12 degree, this is true. Lyft was the first major app-driven ride-sharing service to
13 allow drivers to accept and retain tips. Lyft advertised this over the Internet and
14 through email to prospective drivers.
15 16. However, in order to attract drivers while producing extra to fuel its
16 rapid growth, advertised more than it delivered, resorting to what can only be
17 characterized as deceptive business acts and practices. For example, Plaintiff
18 noticed that he first made about $1800 per week. But, after the first two weeks his
19 referrals from Lyft resulted in shorter, lower-profit ride referrals which only
20 generated $1000 to $1200 per week gross (less gasoline costs and 100,000 mile-
21 per-year car expenses). Lyft also gave new drivers an extra hour of prime time
22 pricing in order to boost the new driver’s impression of earning more than he
23 would. Plaintiff also lost income when Lyft referred him a scheduled, high-profit
24 airport ride but, after he had driven most of the way from Mission Viejo to LAX,
25 Lyft suddenly withdrew the ride and referred the ride to a driver closer to the
26 arriving passenger’s LAX location, leaving Plaintiff to drive a 2 ½ hour, 80 miles
27 round-trip without compensation.
28


1 17. Most particularly relevant to the present suit, Lyft attracted Plaintiff,
2 as it attracts all drivers, by advertising, and in its Terms of Service agreement
3 promising, drivers 80% of the fare, when in fact Lyft paid the driver far less; in one
4 typical example from February 1, 2018, paying Plaintiff only 57% of the fare.
5 18. Until April 9, 2018, Lyft repeated the deceptive practice it had used to
6 attract drivers in its smartphone app display for every ride. In one typical example,
7 the Lyft app offered the passenger a ride priced at over $7 while offering Plaintiff,
8 the driver, the same ride at a fare of only $5. The app displayed to the driver a Lyft
9 “commission” of $1, leaving the driver $4. But to the passenger, the app displays a
10 $7 ride. Thus Lyft retained an additional $2 of the fare while continuing to
11 misrepresent to the driver that he was receiving 80% of the fare.
12 19. On information and belief, Lyft will assert that the 20% constituted its
13 “commission” under the contract with the driver, and that the additional charge to
14 the passenger constituted its “service fee” under a different contract. The fact is
15 that Lyft deceives the driver as to the amount of the fare and retains funds earned
16 by the driver. This is a deceptive business practice. Until April 9, 2018, Lyft did
17 not disclose to the driver that his ‘independent business’ had generated the higher
18 fare than he knew.
19 20. Lyft may argue that there has been no misrepresentation and no fraud
20 -- that its additional service fees are under a separate contract with the rider -- that
21 the service fee was a charge to the rider only, under a rider contract that is entirely
22 separate and distinct from its contract with the driver -- and that this in no way
23 decreases the driver’s net earnings. This characterization is disingenuous and
24 false because Lyft knows very well that its fares are limited in relation to taxi fares.
25 Standard fares were set at a level that would avoid exceeding taxi fares in all but
26 the most extreme location (Manhattan, where average traffic speed is very slow
27 and taxi fares are lower).
28


1 21. Recently, on April 9, 2018, in order to avoid further liability from

2 suits like this, Lyft raised its fares and eliminated its commission, providing
3 increased driver income, and halted its practice of misrepresenting to the driver the
4 fare amount and its practice of misrepresenting that it took only 20% of the fare.
5 Until April 9, although Lyft and Uber raise fares during “premium” or “surge”
6 times of day and charge a premium for luxury cars, both companies set their fares
7 to be lower than taxi fares – on average by about 30%.
8 22. Lyft’s deceptive business acts and practices have unjustly enriched
9 Lyft, Inc. in California at the expense of Plaintiff and its other drivers in California
10 (the California Subclass) and across the Nation (the entire plaintiff Class).
11 23. Lyft’s deceptive business acts and practices also violate California’s
12 Unfair Competition Law and constitute fraudulent inducement to employment and
13 to contract.
14 24. Lyft has generated most of its wealth with the use of the wrongfully-
15 obtained funds. The additional funds Lyft has obtained by deceiving its drivers has
16 fueled Lyft’s business expansion and built the considerable present value of Lyft,
17 Inc.
18 25. Those savings translate into higher net revenues which attract
19 investment capital, attract additional and better technical and marketing staff, and
20 provide for better advertising, skyrocketing Lyft’s market value to $11 billion, in
21 less than 5 years.
22 26. In fact, upon information and belief, discovery and trial are likely to
23 show that the extra funds Lyft has obtained by its deceptive practices constitute the
24 entire value of the Lyft company. The Lyft, Inc. stock is now valued at $11 billion
25 while Lyft lost approximately $250 million in 2017 on gross revenue of about
26 $750,000 million. Without the additional approximately 23% of the fare Lyft
27 obtains by deception (doubling Lyft’s share of the fare from 20% to 43%), Lyft’s
28 stock would be worth nothing, or merely a fraction of its present value.


1 27. In this technical era, the sleight-of-hand is accomplished by computer

2 science. When a customer requests a ride, the Lyft computer checks its database
3 and determines fare by reference to the Lyft database of average competing taxi
4 fares, whether computed by time, distance, or a combination of the two; then
5 adjusts its price accordingly, which results in a fare averaging 30% less than the
6 average predicted taxi fare. In contrast, the human driver does not instantly know
7 the corresponding taxi fare. Thus, the human driver does not know that Lyft is
8 taking 43% of the fare, not 20%.
9 28. As Lyft fares average 30% less than taxi fares, the driver expects to
10 receive an amount that turns out to be about 56% of the comparable taxi fare (80%
11 of the Lyft fare, which is itself about 70% of the comparable taxi fare). But, in the
12 typical example stated above, the driver receives only about 40% of the
13 comparable taxi fare (an average of about 57% of the Lyft fare, which itself is
14 about 70% of the taxi rate). Thus the drivers were until April 9, 2018, being
15 shorted about 16% of the share an objective driver would reasonably expect to
16 receive.
17 29. Lyft fares are limited by taxi fares and an average of 30% below taxi
18 fares. Thus, the lower percentage of the fare represents more than a reference
19 figure; it constituted a concrete, actual loss in income to the driver, which Lyft
20 retained. Lyft invested those funds in its own growth and thereby used the funds
21 obtained by deception to build its company infrastructure and generate its high
22 stock price. The drivers are entitled to the share of the company built with their
23 promised income which Lyft wrongfully retained.
24 30. Lyft’s statements to drivers are deceptive because they tend to deceive
25 the prospective customer who may buy their service; therefore, at the very least,
26 these deceptive acts and practices violate the California Unfair Competition Law,
27 under both the unfair business practice prong and under the fraudulent business
28


1 practice prong, establishing a basis for simple restitution of the funds retained by
2 Lyft without legal entitlement.
3 31. Moreover, as drivers do rely on these misrepresentations, these
4 practices constitution intentional or negligent misrepresentation under California
5 law, providing a basis for fraud damages.
6 32. Lyft drivers are entitled to disgorgement of the unjust enrichment Lyft
7 has obtained unlawfully at the expense of its drivers, including both simple
8 restitution and the increased value of Lyft’s stock attributable to the extra
9 approximately 23% of the fare revenue that belongs to the drivers but Lyft has
10 retained. The drivers are entitled to the investment value of those funds as an
11 interest in Lyft, Inc., as stock or stock options in Lyft, Inc., because the funds were
12 used to increase the stock value.
13 33. In the alternative, Lyft drivers are entitled to damages for

14 misrepresentation or fraudulent inducement; at the very least, the drivers are
15 entitled to simple restitution.
16 34. Lyft and Uber claim that the drivers are independent business people,
17 and that the company merely provides services to the driver and to its customer.
18 This characterization is highly-questionable due to the degree of control these
19 companies exercise over the driver and over the driver’s interactions and relations
20 with customers.
21 35. Drivers have no control over Lyft’s practices because Lyft sets the
22 fares, refers the rides, hires and fires the riders at will, and otherwise exercises such
23 extensive control over the drivers’ work and business that the relationship can only
24 be characterized as that of employer and employee. Under today’s Dynamex test,
25 Lyft drivers cannot be considered independent contractors because Lyft cannot
26 establish any or all elements of the “ABC” test now adopted by California to
27 determine whether California wage orders apply to the protect the worker.
28 36. The ABC test requires that all three of the following factors are met:


1 (A) that the worker is free from the control and direction of the hirer
2 in connection with the performance of the work, both under the contract for
3 the performance of such work and in fact;
4 (B) that the worker performs work that is outside the usual course of
5 the hiring entity’s business; and
6 (C) that the worker is customarily engaged in an independently
7 established trade, occupation, or business of the same nature as the work
8 performed for the hiring entity (in other words, the driver would be
9 transporting passengers for a living even without the use of the Lyft
10 platform.
11 Dynamex Operations West, Inc. v. Superior Court, #S222732 (Cal. April 30, 2018)
12 (unanimous opinion affirming unpublished decision of Court of Appeals, review
13 having been granted as reported in 230 Cal.App.4th 718).

14 37. Lyft cannot establish element B; element C is not true for almost all
15 drivers; and Lyft cannot establish all facets of element A of the ABC test.
16 38. The ABC test is congruent with the respondeat superior test for vicarious
17 tort liability, which determines worker status for the purpose of determining the
18 applicability of the NLRA and its derivative rules for the protection of the worker.
19 Under each of these tests, Lyft drivers are employees.
20
21 CLASS ACTION ALLEGATIONS
22 39. Plaintiff commences this action as a class action pursuant to Rule 23
23 of the Federal Rules of Civil Procedure, including Rule 23(b)(3), on behalf of the
24 following class:
25
All persons residing in the United States of America who entered into
26 contracts with Lyft, Inc. from the time of its inception until April 8, 2018, to
27 provide transportation services to customers of Lyft, Inc. in the United
States in exchange for 75% or 80% of the fare set by Lyft, Inc., and who did
28


1 perform such services, resulting in charges from Lyft, Inc. to the customer
(the rider), and the collection of fare money from the customer by Lyft, Inc.
2
3 40. The Class contains a subclass, the “California Subclass,” defined
4 below.
5 41. Plaintiff re-alleges and incorporates herein by reference each and
6 every allegation in the preceding and subsequent paragraphs.
7 42. Subject to additional information obtained through further
8 investigation and discovery the foregoing definition of the Class may be expanded
9 or narrowed by amendment or amended complaint. Excluded from the Class are
10 Defendant and their affiliates, parents, subsidiaries, employees, offers, agents, and
11 directors in their governmental capacities, any judicial officer presiding over this
12 matter and the members of their immediate families and judicial staff; and class
13 counsel.
14 43. Ascertainable Class: The Class members and Subclass members are
15 readily ascertainable. For purposes of notice and other purposes related to this
16 action, their names and addresses are known to Defendant who frequently
17 communicates the them by electronic mail (email). The number and identify of the
18 Class members are precisely determinable from the records of Defendant.
19 44. Numerosity: The proposed Class has over 700,000 members and is
20 therefore so numerous that joinder of all members is impracticable. The proposed
21 California Subclass has over 100,000 members and is therefore also so numerous
22 that joinder of all members is impracticable. The disposition of their claims as a
23 class will benefit the parties and the Court. The precise number of such persons is
24 unknown because the data required to calculate that number is presently within the
25 sole possession custody and control of Defendant.
26 45. Commonality: There are questions of law and fact common to the
27 Class that predominate over any questions affecting only individual Class
28 members, including, but not limited to, the following:


1 a. Whether Lyft obtained funds from the drivers’ labor without

2 legal entitlement such that the drivers are entitled to restitution.
3 b. Whether the funds obtained by Lyft from the drivers’ labor
4 without legal entitlement were used by Lyft to increase Lyft’s company value as
5 the value of the common and preferred stock of Lyft, Inc. such that the drivers are
6 entitled to disgorgement of the increased value of Lyft stock attributable to the
7 funds obtained by Lyft, Inc. without legal entitlement or, in the alternative, to a
8 ownership of a portion of Lyft, Inc. stock.
9 c. Whether Lyft obtained money from the drivers by fraudulent
10 inducement to employment, by fraudulent inducement to contract, by intentional
11 misrepresentation, or by negligent misrepresentation.
12 d. Whether Lyft employed unfair, fraudulent, or unlawful business
13 acts and practices that would be deceptive to consumers and to Plaintiffs and Class
14 members, and to its potential and existing employees and drivers, and by such
15 practices obtained additional funds from the drivers’ labor.
16 e. The proper measure of damages and the proper measure of
17 restitution or disgorgement of unjust enrichment recoverable by Class members.
18 f. The increase in the value of Lyft common stock attributable to
19 Lyft’s reinvestment of the funds rightfully belonging to Plaintiff and Class
20 members.
21 g. Whether Plaintiff and Class members are entitled to ownership
22 of Lyft common stock in an amount attributable to the increase in value produced
23 by the retention by Lyft or re-investment by Lyft of funds rightfully belonging to
24 Plaintiff and Class members.
25 h. Whether California UCL and fraud law apply to transactions
26 outside of California, and whether principles of Equity, unjust enrichment, and
27 Restitution apply nationwide.
28


1 i. Additional common questions of law and fact as developed

2 during the discovery phase of this litigation.
3 46. Typicality: The claims of the individually named Plaintiffs are
4 typical of the claims of the Class and do not conflict with the interests of any other
5 members of the Class, in that Plaintiffs and the other members of the Class were
6 subjected to the same uniform practices of the Defendant and because Plaintiffs
7 have suffered the injuries described in this Complaint.
8 47. Adequacy of Representation: Plaintiff can fairly and adequately
9 protect the interests of the Class and has no interests adverse to the Class. At all
10 relevant times, Plaintiff and the Class members are and have been similarly
11 situated and have been subject to the same contracts and contract terms.
12 48. Predominance and Superiority: The common questions of law and
13 fact enumerated above predominate over questions affecting only individual

14 members of the Class, and a class action is the superior method for fair and
15 efficient adjudication of the controversy.
16 j. Predominance: Defendants’ actions described herein are
17 generally applicable to the Class as a whole and, as a result, the questions of law
18 and fact common to the Class predominate over any questions affecting only
19 individual Class members.
20 k. Superiority: A class action is superior to other available
21 methods for the fair and efficient adjudication of this controversy. Since the
22 amount of each individual Class member’s claim is small relative to the
23 complexity of the litigation, and due to the financial resources of Defendants, no
24 Class member could afford to seek legal redress individually for the claims alleged
25 herein. Therefore, absent a class action, Class members will continue to suffer
26 losses and Defendants’ misconduct will proceed without remedy.
27 i. Even if Class members themselves could afford such
28 individual litigation, the court system could not. Given the complex legal and


1 factual issues involved, individualized litigation would significantly increase the

2 delay and expense to all parties and to the Court. Individualized litigation would
3 also create the potential for inconsistent or contradictory rulings. By contrast, a
4 class action presents far fewer management difficulties, allows claims to be heard
5 which might otherwise go unheard because of the relative expense of bringing
6 individual lawsuits, and provides the benefits of adjudication, economies of scale
7 and comprehensive supervision by a single court.
8 ii. Finally, Plaintiffs know of no difficulty that will be
9 encountered in the management of this litigation which would preclude its
10 maintenance as a class action.
11 49. The representative and his chosen attorneys are familiar with the
12 subject matter of the lawsuit and have full knowledge of the allegations contained
13 in this complaint to be able to assist in its prosecution. In addition, the

14 representative’s attorneys are competent in the relevant areas of the law and have
15 sufficient experience to vigorously represent the Class. Furthermore, the resources
16 available to counsel ensure that the litigation will not be hampered by a lack of
17 financial capacity. Plaintiff’s attorneys have sufficient financial resources and are
18 willing to absorb the costs of the litigation.
19
20
SUBCLASS ACTION ALLEGATIONS
21
50. The Class contains a subclass, the “California Subclass,” defined as
22
follows:
23
All Class members who, under contract with Lyft, Inc. provided
24
transportation services to customers of Lyft, Inc. primarily in California.
25
26 51. Plaintiff re-alleges and incorporates herein by reference each and
27 every allegation in the preceding and subsequent paragraphs. The incorporation
28 specifically includes the above Class Action Allegations which cover the


1 nationwide Class of which the California Class members are a Subclass and make
2 the same class-related allegations.
3 52. Numerosity: The proposed California Subclass has over 100,000
4 members and is therefore so numerous that joinder of all members is impracticable.
5 The disposition of their claims as a class will benefit the parties and the Court. The
6 precise number of such persons is unknown because the data required to calculate
7 that number is presently within the sole possession, custody and control of
8 Defendant.
9
10 CAUSES OF ACTION
11 COUNT 1
12
UNFAIR COMPETITION
13 (California Business and Professions Code §§ 17200 et seq.)

14 By Plaintiff and the California Subclass Against Defendants
15 53. Plaintiffs incorporate by reference all preceding and subsequent
16 paragraphs here, as though fully set forth in this First Cause of Action
17 54. This claim is based upon sections 17203 and 17204 of the California
18 Business and Professions Code to obtain restitution, disgorgement, declaratory and
19 injunctive relief, and all other remedies available for violations of section 17200
20 of the Business and Professions Code, the California Unfair Competition Act.
21 55. Plaintiffs and Class members are “persons” within the meaning of
22 California Business and Professions Code section 17201.
23 56. The California Unfair Competition Law (“UCL”), Cal. Bus. & Prof.
24 Code §§ 17200, et seq., defines unfair business competition to include any
25 “unlawful, unfair or fraudulent” act or practice, as well as any “unfair, deceptive,
26 untrue or misleading” advertising.
27 57. A business act or practice is “unfair” under the California Unfair
28 Competition Law if the reasons, justifications and motives of the alleged


1 wrongdoer are outweighed by the gravity of the harm to the alleged victims. A
2 business act or practice is “fraudulent” under the UCL if it is likely to deceive
3 members of the consuming public. A business act or practice is “unlawful” under
4 the UCL if it violates any other law or regulation.
5 58. The conduct complained of herein, including but not limited to
6 business acts and practices, violates Business and Professions Code section 17200.
7 The business acts and practices alleged herein display Defendants’ committed,
8 common, continuous, and continuing course of conduct constituting unfair
9 competition by unfair, unlawful, and-or fraudulent business acts and practices
10 within the meaning of section 17200, et seq. as described herein, and are unfair to
11 consumers in the State of California within the meaning of section 17200.
12 59. Each named Plaintiff has suffered actual injury in the form of at least
13 one type of injury described herein, losing money or property as a result of unfair
14 competition as described above, including Defendants’ unlawful, unfair, or
15 fraudulent business acts and practices.
16 60. By such violations of the UCL, Lyft, Inc. has enriched itself to the
17 detriment of drivers and prospective drivers. Therefore the Plaintiff and Class
18 members are entitled to simple restitution of the funds obtained from them by Lyft,
19 Inc. through these unfair, fraudulent, and unlawful business acts and practices.
20 61. The gravity of the harm to Plaintiff and Class members resulting from
21 these unfair acts and practices outweighs any conceivable justifications or motives
22 of Lyft for engaging in such deceptive acts and practices.
23 62. By committing the acts and practices alleged herein, Defendant
24 engaged in, and continue to engage in, unfair business practices within the
25 meaning of Cal. Bus. & Prof. Code §§ 17200, et seq., and Plaintiffs and Class
26 members continue to suffer harm from these actions. Therefore, Plaintiff and
27 Class members are entitled to injunctive relief prohibiting the continuation of such
28 business acts and practices.


1 63. Plaintiffs ask the Court to order Defendants to pay restitution to

2 Plaintiffs and the California Subclass members in the amount of their losses based
3 on violations of the UCL, to pay attorney’s fees and costs, and to enjoin
4 Defendants from continuing to violate the UCL as alleged herein.
5
6
COUNT II
7
UNJUST ENRICHMENT
8
By Plaintiff and Class Members Against Defendants
9
64. Plaintiff Villaseñor herein incorporates by reference all the foregoing
10
paragraphs as though fully set forth herein.
11
65. Plaintiff Villaseñor pleads this claim in the alternative. Because of the
12
misconduct described herein, Defendant Lyft has been unjustly enriched at the
13
expense of Plaintiff and Class members, having received and retained payments
14
from Lyft Riders beyond those promised in Lyft’s advertising and in its other
15
communications and agreements with its drivers.
16
66. Specifically, Defendant Lyft has retained a larger portion of the
17
passenger fare than they promised they would retain and is therefore without legal
18
entitlement to retain those funds. This unjust enrichment has directly benefited
19
Defendant Lyft. And Lyft knew or should have known that drivers would likely be
20
deceived as to the amount of the fare and as to the driver’s percentage share of the
21
full fare.
22
67. The funds obtained by Lyft from the drivers’ labor without legal
23
entitlement were used by Lyft to increase Lyft’s company value as the value of the
24
common and preferred stock of Lyft, Inc. Therefore, the drivers are entitled to
25
disgorgement of the increased value of Lyft stock attributable to the funds Lyft has
26
obtained without legal entitlement.
27
28


1 68. In the alternative, the drivers are entitled to ownership of the portion
2 of Lyft, Inc. stock attributable to the value of the stock increased from the
3 wrongfully obtained funds.
4
5
COUNT III
6
MISREPRESENTATION
7
By Plaintiff and Class Members Against Defendants
8
69. Plaintiff Villaseñor herein incorporates by reference all the foregoing
9
paragraphs as though fully set forth herein.
10
70. Defendant Lyft has engaged in Fraudulent Inducement to
11
Employment and to Contract, and Intentional and Negligent Misrepresentation as
12
described above, and such misrepresentations have actually and proximately

13
caused harm to Plaintiff and Class members.
14
71. Defendant Lyft’s failure to inform Plaintiff Villaseñor and similarly
15
situated Lyft Drivers that the amount being represented to them as the full fare
16
charged the Riders was not in fact the full fare, but rather an amount less than what
17
the Rider was charged, was a willful and intentional misrepresentation of fact made
18
with the intent that Plaintiff and the Class members rely on same. Such
19
misrepresentations fraudulently induced Plaintiff and the Class members to enter
20
into an employment relationship with Lyft, Inc. and to contract with Lyft, initially
21
and repeatedly.
22
72. Plaintiff and the Class entered into employment and into contracts
23
with Lyft and performed services thereunder in reliance on the representations
24
made by Lyft that it would pay them an amount equal to the fare it charged the
25
rider less Lyft’s “Commission” percentage (20% or 25% of the fare, the applicable
26
percentage being based on when the driver contracted with Lyft) and any
27
applicable charges such as service fees, cancellation fees, damage fees, tolls and/or
28
surcharges for each ride he/they successfully completed.


1 73. The statements referred to herein, made by Lyft, were false; Lyft
2 knew them to be false at the time such statements were made and intended the
3 drivers to rely upon such statements; the drivers relied upon such statements to
4 their detriment, accepting employment while being paid a lower level of pay than
5 promised; and drivers were harmed by such misrepresentations and by drivers’
6 reliance upon such misrepresentations.
7 74. Thus, as a direct, proximate, and foreseeable result of
8 misrepresentations, Plaintiff and the Class have been damaged ins an amount to be
9 determined according to proof at the time of trial.
10
11
COUNT IV
12
CONSTRUCTIVE TRUST
13
(California Civil Code §§ 2223, 2224)
14
By Plaintiff and Class Members Against Defendant Lyft, Inc.
15
75. Plaintiffs incorporate by reference all preceding and subsequent
16
paragraphs here, as though fully set forth in this Fourth Cause of Action.
17
76. Defendant Lyft, Inc. has wrongfully detained money, property, and
18
property value that rightfully belong to Plaintiff and Class members. Therefore,
19
Defendant Lyft, Inc. is an involuntary trustee of such property for the benefit of the
20
owner.
21
77. Furthermore, Lyft, Inc. has obtained money rightfully belonging to
22
Plaintiff and Class members by fraud, accident, mistake, and undue influence, and
23
by the violation of a trust by a fiduciary, and other wrongful acts, and is without
24
other and better rights to such money, and is therefore an involuntary trustee of the
25
money gained, for the benefit of Plaintiff and Class members.
26
78. In addition, Lyft, Inc. has invested such money in the company,
27
resulting in an increase in the wealth of the company as measured by its stock price
28
and market value. This increased stock price and company value also rightfully


1 belongs to Plaintiff and Class members, and Lyft, Inc. is without other and better
2 rights to such increased company value, and is therefore an involuntary trustee of
3 the increased company value, for the benefit of Plaintiff and Class members.
4 79. Therefore, Plaintiff asks the Court to declare that Lyft, Inc. is an
5 involuntary trustee of said money gained and of said increased company value and
6 stock and impose a constructive trust over said money and over Lyft, Inc. common
7 stock in an amount sufficient to return to Plaintiff and Class members common
8 stock in the amount that Plaintiff and Class members would own had they invested
9 said funds in Lyft, Inc. common stock at the time they earned it.
10
11
REQUEST FOR RELIEF
12
WHEREFORE, Plaintiff Villaseñor, individually and on behalf of the

13
proposed Class and Subclass, requests relief against the Defendant as follows:
14 a. Certification of the Class;
15 b. Designation of Plaintiff Villaseñor as Representative of the Class;
16 c. Designation of Plaintiff’s counsel of record as Class Counsel for the
Class;
17
d. An award of damages, in an amount to be determined at trial;
18 e. Restitution in an amount to be determined at trial;
19 f. Disgorgement of unjust enrichment in an amount to be determined at
20 trial;
21 g. The imposition of a Constructive Trust over funds rightfully belonging to
Plaintiff and Class members but wrongfully retained by Lyft, Inc. Traced
22
to include property and increased property value obtained by investment
23 and re-investment of such funds;
24 h. An appropriate service payment to Plaintiff for his service as Class
25 Representative;
i. Reasonable attorneys’ fees and costs of this action, including expert fees;
26
j. Pre-judgment and post-judgment interest as provided by law;
27 k. Such other and further relief that the Court may deem just and proper.
28


1
2 Dated: May 9, 2018 Respectfully submitted,
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7 By:______________________________________
LARRY A. PELUSO
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1
2 JURY DEMAND
3 Plaintiff, on behalf of himself and the proposed Class, demand a trial by jury
4 on all claims so triable.
5
6 Dated: May 9, 2018 Respectfully submitted,
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By:______________________________________
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LARRY A. PELUSO
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JS-CAND 44 (Rev. 06/17) Case 3:18-cv-02769-JCS Document 1-1 Filed 05/10/18 Page 1 of 2
CIVIL COVER SHEET
The JS-CAND 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law,
except as provided by local rules of court. This form, approved in its original form by the Judicial Conference of the United States in September 1974, is required for the Clerk of
Court to initiate the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)
I. (a) PLAINTIFFS DEFENDANTS
Fernando Villasenor Lyft, Inc. and Does 1-5
(b) County of Residence of First Listed Plaintiff Orange County of Residence of First Listed Defendant San Francisco
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.
(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)
Peluso Law Group, 14435-C Big Basin Way #289
Saratoga, CA 95070. (949) 395-0092
II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
PTF DEF PTF DEF
1 U.S. Government Plaintiff 3 Federal Question Citizen of This State 1 1 Incorporated or Principal Place 4 4
(U.S. Government Not a Party)
of Business In This State
Citizen of Another State 2 2 Incorporated and Principal Place 5 5
2 U.S. Government Defendant 4 Diversity of Business In Another State
(Indicate Citizenship of Parties in Item III)
Citizen or Subject of a 3 3 Foreign Nation 6 6
Foreign Country
IV. NATURE OF SUIT (Place an “X” in One Box Only)

CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure of 422 Appeal 28 USC § 158 375 False Claims Act
120 Marine Property 21 USC § 881 423 Withdrawal 28 USC 376 Qui Tam (31 USC
310 Airplane 365 Personal Injury – Product
130 Miller Act Liability 690 Other § 157 § 3729(a))
315 Airplane Product Liability
140 Negotiable Instrument 367 Health Care/ 400 State Reapportionment
320 Assault, Libel & Slander LABOR PROPERTY RIGHTS
150 Recovery of Pharmaceutical Personal 410 Antitrust
330 Federal Employers’ 710 Fair Labor Standards Act 820 Copyrights
Overpayment Of Injury Product Liability 430 Banks and Banking
Liability 720 Labor/Management 830 Patent
Veteran’s Benefits 368 Asbestos Personal Injury 450 Commerce
340 Marine Relations 835 Patent─Abbreviated New
151 Medicare Act Product Liability
345 Marine Product Liability 740 Railway Labor Act Drug Application 460 Deportation
152 Recovery of Defaulted PERSONAL PROPERTY 470 Racketeer Influenced &
350 Motor Vehicle 751 Family and Medical 840 Trademark
Student Loans (Excludes 370 Other Fraud Corrupt Organizations
355 Motor Vehicle Product Leave Act
Veterans) 371 Truth in Lending SOCIAL SECURITY
Liability 790 Other Labor Litigation 480 Consumer Credit
153 Recovery of 380 Other Personal Property 861 HIA (1395ff)
360 Other Personal Injury 791 Employee Retirement 490 Cable/Sat TV
Overpayment Damage Income Security Act 862 Black Lung (923) 850 Securities/Commodities/
of Veteran’s Benefits 362 Personal Injury -Medical
Malpractice 385 Property Damage Product 863 DIWC/DIWW (405(g)) Exchange
160 Stockholders’ Suits Liability IMMIGRATION
864 SSID Title XVI 890 Other Statutory Actions
190 Other Contract 462 Naturalization
CIVIL RIGHTS PRISONER PETITIONS 865 RSI (405(g)) 891 Agricultural Acts
195 Contract Product Liability Application
440 Other Civil Rights HABEAS CORPUS 893 Environmental Matters
196 Franchise 465 Other Immigration FEDERAL TAX SUITS
441 Voting 463 Alien Detainee Actions 895 Freedom of Information
870 Taxes (U.S. Plaintiff or
REAL PROPERTY 442 Employment Act
510 Motions to Vacate Defendant)
210 Land Condemnation Sentence 896 Arbitration
443 Housing/ 871 IRS–Third Party 26 USC
220 Foreclosure Accommodations 530 General § 7609 899 Administrative Procedure
445 Amer. w/Disabilities– Act/Review or Appeal of
230 Rent Lease & Ejectment 535 Death Penalty
Employment Agency Decision
240 Torts to Land OTHER
446 Amer. w/Disabilities–Other 950 Constitutionality of State
245 Tort Product Liability 540 Mandamus & Other Statutes
290 All Other Real Property 448 Education
550 Civil Rights
555 Prison Condition
560 Civil Detainee–
Conditions of
Confinement
V. ORIGIN (Place an “X” in One Box Only)

1 Original 2 Removed from 3 Remanded from 4 Reinstated or 5 Transferred from 6 Multidistrict 8 Multidistrict
Proceeding State Court Appellate Court Reopened Another District (specify) Litigation–Transfer Litigation–Direct File
VI. CAUSE OF Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
CAFA (Class Action Fairness Act) 28 U.S.C. Section 1332(d) (minimal diversity standard; plaintiffs reside and are injured in over 30 U.S. states)
ACTION
Brief description of cause:
Unjust Enrichment and California Unfair Competition Law (Cal. Bus. & Prof. Code 17200 et seq.)
VII. REQUESTED IN CHECK IF THIS IS A CLASS ACTION DEMAND $ 3,000,000,000.00 CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, Fed. R. Civ. P. JURY DEMAND: Yes No
VIII. RELATED CASE(S), JUDGE DOCKET NUMBER

IF ANY (See instructions):
IX. DIVISIONAL ASSIGNMENT (Civil Local Rule 3-2)
(Place an “X” in One Box Only) SAN FRANCISCO/OAKLAND SAN JOSE EUREKA-MCKINLEYVILLE
DATE 05/10/2018 SIGNATURE OF ATTORNEY OF RECORD /s/ Larry A. Peluso
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JS-CAND 44 (rev. 07/16) Case 3:18-cv-02769-JCS Document 1-1 Filed 05/10/18 Page 2 of 2
INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS-CAND 44
Authority For Civil Cover Sheet. The JS-CAND 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and
service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved in its original form by the Judicial
Conference of the United States in September 1974, is required for the Clerk of Court to initiate the civil docket sheet. Consequently, a civil cover sheet is
submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
I. a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the “defendant” is the location of the tract of land involved.)
c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section “(see attachment).”
II. Jurisdiction. The basis of jurisdiction is set forth under Federal Rule of Civil Procedure 8(a), which requires that jurisdictions be shown in
pleadings. Place an “X” in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
(1) United States plaintiff. Jurisdiction based on 28 USC §§ 1345 and 1348. Suits by agencies and officers of the United States are included here.
(2) United States defendant. When the plaintiff is suing the United States, its officers or agencies, place an “X” in this box.
(3) Federal question. This refers to suits under 28 USC § 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code
takes precedence, and box 1 or 2 should be marked.
(4) Diversity of citizenship. This refers to suits under 28 USC § 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)
III. Residence (citizenship) of Principal Parties. This section of the JS-CAND 44 is to be completed if diversity of citizenship was indicated above.
Mark this section for each principal party.
IV. Nature of Suit. Place an “X” in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is
sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than
one nature of suit, select the most definitive.
V. Origin. Place an “X” in one of the six boxes.
(1) Original Proceedings. Cases originating in the United States district courts.
(2) Removed from State Court. Proceedings initiated in state courts may be removed to the district courts under Title 28 USC § 1441. When the
petition for removal is granted, check this box.
(3) Remanded from Appellate Court. Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
(4) Reinstated or Reopened. Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
(5) Transferred from Another District. For cases transferred under Title 28 USC § 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
(6) Multidistrict Litigation Transfer. Check this box when a multidistrict case is transferred into the district under authority of Title 28 USC
§ 1407. When this box is checked, do not check (5) above.
(8) Multidistrict Litigation Direct File. Check this box when a multidistrict litigation case is filed in the same district as the Master MDL docket.
Please note that there is no Origin Code 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute.
VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC § 553. Brief Description: Unauthorized reception of cable service.
VII. Requested in Complaint. Class Action. Place an “X” in this box if you are filing a class action under Federal Rule of Civil Procedure 23.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS-CAND 44 is used to identify related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.
IX. Divisional Assignment. If the Nature of Suit is under Property Rights or Prisoner Petitions or the matter is a Securities Class Action, leave this
section blank. For all other cases, identify the divisional venue according to Civil Local Rule 3-2: “the county in which a substantial part of the
events or omissions which give rise to the claim occurred or in which a substantial part of the property that is the subject of the action is situated.”
Date and Attorney Signature. Date and sign the civil cover sheet.

Villaseñor V Lyft

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Case 3:18-cv-02769-JCS Document 1 Filed 05/10/18 Page 1 of 21

1 PELUSO LAW GROUP, PC

15 1. Unfair Competition in Violation

1 CLASS ACTION COMPLAINT

1 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN:

Saratoga, California 95070

13 2016, operating in California.

2 CLASS ACTION COMPLAINT

1 6. Plaintiff Fernando Villaseñor also is a resident and citizen of the State

Saratoga, California 95070

3 CLASS ACTION COMPLAINT

Saratoga, California 95070

4 CLASS ACTION COMPLAINT

Saratoga, California 95070

5 CLASS ACTION COMPLAINT

1 21. Recently, on April 9, 2018, in order to avoid further liability from

Saratoga, California 95070

6 CLASS ACTION COMPLAINT

1 27. In this technical era, the sleight-of-hand is accomplished by computer

Saratoga, California 95070

7 CLASS ACTION COMPLAINT

Saratoga, California 95070

13 33. In the alternative, Lyft drivers are entitled to damages for

8 CLASS ACTION COMPLAINT

Saratoga, California 95070

13 having been granted as reported in 230 Cal.App.4th 718).

9 CLASS ACTION COMPLAINT

Saratoga, California 95070

10 CLASS ACTION COMPLAINT

1 a. Whether Lyft obtained funds from the drivers’ labor without

Saratoga, California 95070

11 CLASS ACTION COMPLAINT

1 i. Additional common questions of law and fact as developed

Saratoga, California 95070

13 fact enumerated above predominate over questions affecting only individual

12 CLASS ACTION COMPLAINT

1 factual issues involved, individualized litigation would significantly increase the

Saratoga, California 95070

13 in this complaint to be able to assist in its prosecution. In addition, the

13 CLASS ACTION COMPLAINT

Saratoga, California 95070

13 (California Business and Professions Code §§ 17200 et seq.)

14 CLASS ACTION COMPLAINT

Saratoga, California 95070

15 CLASS ACTION COMPLAINT

1 63. Plaintiffs ask the Court to order Defendants to pay restitution to

Saratoga, California 95070

16 CLASS ACTION COMPLAINT

Saratoga, California 95070

described above, and such misrepresentations have actually and proximately

17 CLASS ACTION COMPLAINT

Saratoga, California 95070

18 CLASS ACTION COMPLAINT

Saratoga, California 95070

WHEREFORE, Plaintiff Villaseñor, individually and on behalf of the

19 CLASS ACTION COMPLAINT

Saratoga, California 95070

20 CLASS ACTION COMPLAINT

Saratoga, California 95070

21 CLASS ACTION COMPLAINT

IV. NATURE OF SUIT (Place an “X” in One Box Only)

V. ORIGIN (Place an “X” in One Box Only)

VIII. RELATED CASE(S), JUDGE DOCKET NUMBER