Lyft Agrees To $272.5 Million California Driver Settlement
The proposed settlement would compensate drivers for alleged wage and benefit violations before Proposition 22 changed their classification under California law.
Lyft has agreed to pay $272.5 million to settle California claims that it improperly classified drivers as independent contractors rather than employees. The agreement still needs court approval. It addresses alleged violations from before voters approved Proposition 22 in 2020, while similar claims against Uber remain unresolved.
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What the settlement would cover
Engadget reports that at least $237,075,000 of the settlement would be reserved for workers owed minimum wage and benefits. It says driver eligibility and compensation would depend on hours and miles driven from April 5, 2016, through December 15, 2020. TechCrunch gives a slightly different start date for the alleged violations—April 6, 2016—and the same end date.
According to TechCrunch, the California Labor Commissioner’s Office alleged that Lyft drivers were denied minimum wage, overtime, paid sick leave, timely wage payments and other employee protections. Labor Commissioner Lilia García-Brower said her office would give up its share of the settlement so those funds could go to drivers who filed wage claims, TechCrunch reports.
Lyft said in a regulatory filing that settling would spare it the cost and distraction of prolonged litigation, according to TechCrunch. The company maintains that its drivers were properly classified under the law.
How California’s classification rules changed
The reports describe related legal actions but identify different filing dates. Engadget says California filed a lawsuit against Lyft and Uber in May 2020. TechCrunch focuses on a lawsuit filed by the California Labor Commissioner’s Office against Lyft in August 2020. TechCrunch says actions brought by the labor commissioner, the state attorney general and several city attorneys were coordinated in San Francisco Superior Court in September 2021.
California’s Assembly Bill 5, passed in 2019, established criteria for determining whether workers should be treated as employees rather than contractors. As Engadget explains, its original rules would have entitled Lyft and Uber drivers to a minimum wage and other protections. The companies backed Proposition 22, which voters approved in November 2020. That measure allowed app-based transportation drivers to remain contractors while providing certain benefits, including healthcare subsidies, Engadget reports. Engadget also notes that the California Supreme Court upheld Proposition 22 in 2024.
What remains unresolved
If approved, the agreement would resolve the claims against Lyft covered by the settlement, but not the similar case against Uber. For drivers, the immediate question is whether they qualify for compensation tied to work performed during the period at issue. For gig-work platforms, the case reflects the financial consequences of California’s earlier dispute over driver classification, even though Proposition 22 now governs app-based transportation drivers’ status in the state.
Sources
This story was compiled by AI from the reports below. Read the originals for the full details.