Lyft California Employee Misclassification Settlement

The ride-hailing company Lyft agreed to pay $272.5 million to resolve coordinated claims brought by California officials and drivers. These claims centered on the allegation that Lyft misclassified its drivers as independent contractors, which allegedly resulted in the denial of wages and other employment benefits. The litigation originated around 2020, with initial lawsuits filed by the California attorney general and city attorneys for Los Angeles, San Diego, and San Francisco concerning driver classification practices.

The allegations concern conduct that took place between April 5, 2016, and December 15, 2020, prior to the implementation of Proposition 22. Officials claimed that Lyft's classification methods deprived drivers of rights such as minimum wage, overtime pay, and reimbursement for work-related expenses. The proposed settlement structure involves Lyft paying $120 million in the first year, followed by $152.5 million over the subsequent three years, with payments on the latter amount accruing 5% simple annual interest.

Eligible drivers are generally those who completed at least one Lyft ride starting or ending in California between April 5, 2016, and December 15, 2020. The distribution of funds to drivers will primarily be based on the mileage driven while transporting passengers during the specified period. The settlement also allocates funds to California and participating cities as civil penalties, and drivers with prior wage claims before the labor commissioner would receive additional compensation.