The ride-sharing company Lyft is facing a class-action lawsuit in the San Francisco district court because of time and attendance policies that categorized employees as independent contractors. Moreover, the company is charged with taking a 20 percent gratuity fee from all drivers, according to San Francisco Weekly.

Lyft argues it is strictly a provider of a mobile app that is the basis for a "driver-for-hire" business model. Accordingly, all individuals who utilize the app to identify and schedule passenger pick-up and transit are not technically employees of the software manufacturer. Lead plaintiff Patrick Cotter alleged drivers are employees of the company and therefore should be given the same rights under the California Labor Code as other employees.

In addition, Cotter claimed the company should provide a standardized record-keeping form for wages that include information regarding the time spent and distance covered during working hours. As a result, the class-action suit seeks $4.5 million in damages for drivers. This was calculated by taking the 20 percent tip charge into account. The average tip left to drivers is $15, and after 1.5 million Lyft rides provided to customers, the plaintiffs allege drivers are owed the multi-million dollar payment.

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