Lyft to pay $272.5 million to settle suit over driver misclassification

Lyft has agreed to pay $272.5 million to settle claims that it misclassified California drivers as independent contractors between April 2016 and December 2020, state and city officials announced. About $237 million, or 87 percent, is earmarked for drivers, to be distributed by a third-party administrator based on hours and miles driven, pending a judge's approval.

The case traces back to the 2018 Dynamex ruling and the 2019 AB 5 law, which made it harder to classify gig workers as contractors, and to a 2020 lawsuit by California's attorney general and several city attorneys. Proposition 22 later exempted app-based drivers from AB 5, but since it took effect after the settlement's covered period, Lyft is not required to reclassify drivers going forward.

Lyft, in its own statement, said most drivers 'have always wanted to be independent contractors' and framed the settlement as closing a chapter from 'a very different time.' Uber remains a defendant in the same litigation, which continues.

The full dispatch is available from the source below.