Lyft to Pay $272 Million in California Driver Settlement

Lyft has agreed to pay $272.5 million to settle claims brought by California, several local governments and two drivers. The case centered on whether Lyft improperly classified drivers before Proposition 22 permitted ride-hailing companies to use independent-contractor status. Rob Bonta, California’s attorney general, said drivers working from 2016 through 2020 should have received protections including minimum wage, overtime pay and repayment of job expenses.

At least $237 million will be divided among qualifying drivers, making this California’s biggest settlement involving worker misclassification. Eligibility and payment amounts will reflect the time and mileage each person drove for Lyft from April 2016 through December 2020. More than 1,600 drivers submitted wage claims through the California Labor Commissioner’s Office, but the agreement also covers other eligible drivers. Rideshare Drivers United said its members initiated 5,000 claims involving Lyft and Uber drivers; its Lyft claims sought $434 million for roughly 1,900 people.

The litigation was pursued by state officials and the cities of San Francisco, Los Angeles and San Diego, with the combined case handled in San Francisco Superior Court. Court approval is required before a settlement administrator can contact drivers and distribute money. Lyft may spread its contributions to the fund across four years. For Simi Valley residents who drove for Lyft during the covered period, the agreement could mean compensation tied directly to their hours and miles. The separate case against Uber remains unresolved and could proceed to trial.