Lyft agrees $272.5m California settlement over driver pay claims

• California officials and Lyft announced a $272.5m agreement to resolve claims over driver classification and alleged labour-law violations.
• At least $237.075m is reserved for drivers, with payments based on hours and miles worked.
• More than 1,600 drivers who filed wage claims through the state will receive additional funds.
• The deal needs San Francisco Superior Court approval, and the final payment formula and recipient count are not yet public.

The agreement announced on 1 October would resolve claims that Lyft wrongly treated California drivers as independent contractors from 2016 to 2020, denying them protections including minimum wages, overtime and reimbursement for work expenses. California’s Labor Commissioner’s Office filed its own lawsuit in August 2020; the claims were later coordinated in San Francisco Superior Court with state, city and private actions.¹

The $272.5m total includes legal fees, costs and expenses, so it is not all going to drivers. The California Attorney General’s Office says at least $237.075m is set aside for drivers, with eligibility and compensation based on hours and miles driven during the covered period. A third-party administrator is to contact eligible workers after the court approves the settlement and Lyft starts funding it.²³

The Labor Commissioner’s Office says more than 1,600 drivers who filed administrative wage claims will receive additional money. The office is redirecting its $5.45m share of penalties to those claimants, whose mileage calculation will be doubled. Officials have not announced how many drivers in total will receive payments or the final formula for individual awards.¹

Lyft’s filing says the company may spread payments over four years, with interest accruing after the first year. It also says the agreement is not an admission of fact or liability. The deal settles allegations; it is not a court finding that Lyft’s drivers were employees. Lyft says it believes drivers were properly classified.³⁴

The case concerns work before Proposition 22, the 2020 ballot measure that established a separate classification framework for qualifying app-based drivers. The settlement does not require Lyft to change how it classifies drivers now or provide compensation for work after the covered period.¹⁴

There is a one-day discrepancy in official accounts of when the covered period began: Lyft’s filing and the Attorney General’s announcement say 5 April 2016, while the Labor Commissioner’s Office says 6 April. All three give 15 December 2020 as the end date. The exact start date should be checked against the settlement terms before drivers rely on it to assess eligibility.³²¹

Footnotes

1. California Labor Commissioner’s Office announcement. ↩ ↩² ↩³ ↩⁴

2. California Attorney General’s Office announcement. ↩ ↩²

3. Lyft’s 8-K filing with the US Securities and Exchange Commission. ↩ ↩² ↩³

4. San Francisco Chronicle report on the settlement and Lyft’s position. ↩ ↩²