Lyft has agreed to pay $272.5 million to resolve a major lawsuit in California regarding how the ride-hailing platform classified its drivers. Filed originally in 2020 by the state’s Labor Commissioner, the legal action alleged that the company improperly treated drivers as independent contractors rather than employees, thereby denying them standard benefits and wage protections.
The financial agreement addresses disputed practices that occurred between 2016 and 2020, prior to the passage of Proposition 22 which established new rules for gig economy workers. Although Lyft maintains its classification was lawful and notes that drivers favor flexibility, the company decided to settle to eliminate ongoing legal costs and refocus on business operations.
- Lyft to pay $272.5 million to settle California driver lawsuit
- Lawsuit centered on misclassifying drivers as independent contractors
- Settlement covers violations from 2016 through 2020
- Funds will be distributed directly to affected drivers
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