Lyft is paying $272.5M to settle lawsuit over how it classified drivers

Today, gig economy drivers are classified as contractors. This settlement clears up a lingering lawsuit from 2020 when that was still an unanswered issue. Lyft has agreed to pay $272.5 million to settle a lawsuit accusing the ride-hailing company of violating California law by misclassifying drivers as independent contractors, instead of employees. The company said in a regulatory filing that it believes the settlement will allow it to avoid the “costs and distraction of protracted litigation and enable management to maintain its focus on executing its business objectives.” The settlement stems from a lawsuit filed by the California Labor Commissioner’s Office in August 2020 that accused Lyft of treating drivers as independent contractors rather than as employees, as required under state law at the time.

The lawsuit alleged that drivers were denied minimum wage and overtime, as well as other benefits and protections provided to employees, including paid sick leave and timely wage payments. “This settlement is about the workers who came forward and spoke up. Their voices made this outcome possible,” California Labor Commissioner Lilia García-Brower said in a statement, adding that the LCO will forgo its share of the settlement and direct those funds to drivers who filed wage claims. The settlement, which still must be approved by a judge, covers alleged violations from April 6, 2016, to