Lyft to pay $272.5 million to settle California driver misclassification claims

Lyft has agreed to a $272.5 million settlement to resolve allegations that it misclassified drivers as independent contractors rather than employees in California between April 2016 and December 2020. The settlement, announced by California Attorney General Rob Bonta and several city attorneys, addresses claims of wage theft and violations of the California Labor Code and Unfair Competition Law.

Approximately 87% of the settlement funds will be distributed directly to drivers. Additionally, over 1,600 drivers who filed wage claims through the California Labor Commissioner’s Office will receive extra funds from the $5.45 million in penalties originally intended for the state. The settlement also includes a multiplier that doubles the mileage used to calculate certain payments for wage claimants.

The agreement does not require Lyft to reclassify its drivers moving forward or provide relief for work performed after the settlement period under the framework established by Proposition 22.