It is rare for a general counsel who joins an early-stage startup to be around for its entire journey as it evolves into a multibillion-dollar company. Kirstin Sverchek, the General Counsel of Lyft, is one notable example. She has been the General Counsel of Lyft since 2012, the same year Lyft was founded. Indeed, Ms. Sverchek was Lyft’s first in-house lawyer. Today she is the legal head of one of Silicon Valley’s most influential tech companies.
Ms. Sverchek has played an invaluable role in growing Lyft from a small startup into a leading tech company. Her long tenure at Lyft has also given her unique insight into how a company’s legal needs change as it transitions from an emerging startup into a major industry player.
Lyft Was Like a Startup
When the San Francisco-based company hired Ms. Sverchek, Lyft was a fraction of its current size. Culturally, it felt akin to a startup, and it operated mostly from a university campus. In April 2012, Lyft raised $7.5 million in funding. Ms. Sverchek’s focus during Lyft’s early days was more on the legal issues typical of a growing startup than on the large government regulatory issues that affect Lyft today.
At technologies companies, the role of in-house legal counsel has rapidly changed from a specialist department to an integral part of the business team. At Lyft, this especially rings true. In-house attorneys must communicate legal guidance in a way that ties to business goals. This requires a detailed understanding of Lyft’s services and long-term business objectives.
The Company’s Expansion
As a transportation services company, Lyft has expanded its product offerings to include car rentals, transit, bikes, and scooters. Each new product line involves open communication with local and federal governments to avoid clashes with regulators later. It also involves receiving authorizations and permits from government agencies.
As Lyft has expanded into international markets, Ms. Sverchek has navigated the complexity of employment, cybersecurity, intellectual property, and laws in different jurisdictions. Lyft expanded into Canada in 2017, with operations in Toronto, Ottawa, and Hamilton. Although it does not operate in nearly as many international markets as Uber, which operates in over 80 countries, Lyft has ambitions to expand.
Ride-Sharing Drivers as Employees or Independent Contractors?
One of the largest legal battles ride-hailing apps have grappled with over the years is the classification of workers. The debate over whether ride-sharing app drivers are independent contractors or employees has been highly contested. Ride hailing apps like Uber and Lyft have asserted that drivers are independent contractors. However, some regulators have attempted to classify drivers as workers eligible for benefits like healthcare and paid leave, which has been met with varying degrees of success.
In March 2021, the UK Supreme Court ruled that Uber drivers are workers entitled to benefits including paid holidays and minimum wages. The court rejected the ride-hailing industry’s treatment of drivers as self-employed contractors. As a result, Uber would be required to pay its drivers for hours they logged into the app, regardless of ride demand.
Lyft Concentrates on Safety After Sexual Assaults
Another major area of concern for Lyft’s legal department has been safety. In the wake of several sexual assault incidents, there has been scrutiny towards Lyft’s background check process, as well as measures to protect passengers from unsafe driver behavior. To increase transparency, Lyft has vowed to release periodic safety reports disclosing incidents of sexual assault and abuse. An investor lawsuit claims Lyft concealed sexual assault information and bike fleet brake issues ahead of its $2 billion IPO in 2019.
In her role as Lyft’s General Counsel, Ms. Sverchek has also shaped Lyft’s stance on certain public policy issues. When Texas implemented SB-8, a restrictive abortion law giving private citizens the ability to sue anyone who assists a woman in getting an abortion, Lyft executives immediately gathered to figure out an action plan. They announced Lyft would cover all legal fees incurred by drivers sued under the Texas law. Sverchek notes the company received an overwhelmingly positive reaction for this move.
Ms. Sverchek’s Career
Ms. Sverchek began her career as an associate at Gunderson Dettmer, a corporate law firm that largely serves startup clients. At 37 years old, she is one of the youngest individuals to serve as general counsel of a multibillion company.
In August 2021, Lyft achieved second quarter profitability of $23.8 million. It has over 4,600 employees, including hundreds of employees in legal and compliance roles. In her function as general counsel and as a critical member of the executive leadership team, Ms. Sverchek plans to help Lyft continue to achieve its vision of building a transportation network.