Frontal attack on gig economy

Suit against Lime to end freelance scooter work?

I’ve made $250 in 30 hours — that works out to a profit of $8.33 per hour. But I’ve also spent $55 on gas. (From Reader story in July)
  • I’ve made $250 in 30 hours — that works out to a profit of $8.33 per hour. But I’ve also spent $55 on gas. (From Reader story in July)
  • Image by Matthew Suárez

A Northern California man working as a "Juicer" for electric scooter-share operator Lime has filed suit against the company, claiming it improperly classifies thousands of workers as independent contractors in a system designed to skirt minimum wage laws and other employee protections.

July story by Dave Rice in Reader

July story by Dave Rice in Reader

In an amended complaint filed last week by Yassin Olabi of San Mateo County, Olabi alleges that despite claims made by Lime that Juicers could earn in excess of $30 hourly for collecting, charging, and re-deploying its scooters throughout the city his earnings working for the company averaged less than $5 per hour. California's minimum wage for large companies is currently $11.

"Lime could simply hire regular employees to drive around a city, find, and recharge its scooters," the plaintiff's counsel observes. "However, to do so would be expensive; Lime would have to pay its workers minimum wage for all the time they spend looking for, transporting, charging, and returning its scooters. Lime would also have to properly equip them and pay all expenses they incur in order to do the charging work."

Olabi's complaint cites a July Reader story in which I took a Juicer job and fared only slightly better, netting $5.87 per hour over the course of a week and change.

Other complaints: the company deducts workers' pay if they deliver a scooter with less than a 95 percent battery charge (a former policy of keeping the scooter's headlights constantly on resulted in some depleting their batteries on the way to deployment) or in the wrong location, Lime forces its workers to purchase (or pay to ship) proprietary chargers before beginning work, they've failed to provide proper paystubs (workers are paid via direct deposit with no accounting of their work aside from an email describing successful deployments), and has intentionally over-hired, creating excessive competition for limited work.

At the heart of Olabi's case is a recent California Supreme Court decision that changed the means test for determining whether a worker is an employee or independent contractor last April. Under a new "ABC Test" formula, an employer must establish that each of the following are true:

  • - That a worker is free from the control and direction of the hiring entity in connection with performance of the work
  • - That the worker performs work that is outside the usual course of the hiring entity's business; and
  • - That the worker is engaged in an independently established trade, occupation, or business

Lime's own public statements seem to contradict at least one of these qualifiers. The complaint cites a statement made by Lime to the City of Santa Monica in a permit application:

  • Juicers have strict guidelines for how, when and where they can deploy our scooter fleet. Juicers are equipped with proper in-app education on how to properly park a scooter in the street, following Lime and City guidelines. Each parking location selected by a juicer contains further instructions on where scooters should be parked and how many scooters are permitted to be parked at that location . . . Juicers are also required to take a picture of each deployment in order to maintain accountability.

"Juicers do not perform work that is outside the usual course of Lime’s business," the complaint continues, attacking the second point. "Instead they perform work that is so critical to Lime’s business that it is highlighted on the front page of Lime’s website and is work that must be performed daily, en masse, in order for Lime’s electric scooters to operate."

"Likewise, there is no independently established trade, occupation, or business for electric scooter chargers to which Juicers could conceivably belong."

Olabi's amended complaint was filed 65 days after his San Francisco-based counsel Rosen, Bien, Galvan and Grunfeld sent a letter to Lime officials requesting action with regard to his complaints. He seeks a judgment declaring the firm's labor practices unlawful and an injunction to stop them going forward in addition to monetary relief.

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One more example of the abuse of employees by pretending they are "independent" when they are anything but. This pattern of claiming that closely monitored and supervised workers, all of them essential to the core business, are somehow independent has been going on for years, and is intensifying. There is little surprise here--this business (if you can call it that) is based on exploitation of all those who are actually stakeholders. The customers don't always get what they are charged for. The cities lose control of their quality of life and safety of residents. The support staff ends up beggared with grossly substandard wages and far too many expenses to pay themselves. If this were happening with any controlled substance, it would be treated as racketeering, and the perpetrators could be charged with serious crimes. Ah, but it's just scooters, those innocuous things that tourists tootle around in. What's the problem here? Rackets can take on many forms, and this kind of thing, and any sort of gig work, can be as pernicious as any other rackets.

Will Uber do the same thing with its new electric JUMP bikes now in San Diego (and other cities)?

There are very few people who are independent contractors. Most "independent contractors" are really low paid workers that are responsible for their own benefits and taxes. The government misses out on taxes that would normally be paid by the employer.

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