Lyft settles driver misclassification lawsuit for $272.5M
Lyft has reached a $272.5 million settlement with California authorities over allegations of misclassifying drivers. The settlement covers the period between 2016 and 2020, during which drivers were classified as independent contractors.
Ride-hailing company Lyft has agreed to a $272.5 million settlement with California's attorney general and three city attorneys. The lawsuit alleged that the company committed wage theft by misclassifying drivers as independent contractors rather than employees between 2016 and 2020.
The settlement stems from a lawsuit filed in May 2020, which also targeted Uber. Plaintiffs in that case argued that the ride-hailing companies evaded state law by classifying their drivers as independent contractors. This agreement with Lyft resolves claims related to that period.
While Lyft has settled, the legal case against Uber is ongoing. The terms of the settlement have not been fully disclosed, but it addresses a significant aspect of the ongoing debate surrounding driver classification in the gig economy. The classification of drivers has substantial implications for wages, benefits, and labor rights.
This case highlights broader concerns about labor practices within the gig economy. Regulators and lawmakers are increasingly scrutinizing the business models of platform companies that rely on independent contractor classifications.