Lyft California Settlement
Lyft Agrees to Pay $272.5 Million to Settle California Driver Misclassification Lawsuit
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Key Points
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California Attorney General Rob Bonta said Lyft spent years trying to move the case into private arbitration while the company continued to grow.
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California Labor Commissioner Lilia García-Brower said the agency would waive its share of the settlement and direct those funds to drivers who had filed wage claims.
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The agreement covers claims from April 5, 2016, through December 15, 2020, and a third-party administrator is expected to contact eligible drivers; a website, email address and call center will also be set up for questions.
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Alvaro Bolainez, vice president of Rideshare Drivers United, said drivers had waited six years for the settlement, adding, “It’s a big settlement — but it’s not big enough to co...”
Lyft agreed to pay $272.5 million to settle a California lawsuit alleging it misclassified drivers as independent contractors from 2016 through 2020. California Attorney General Rob Bonta called it the state's largest worker-misclassification settlement, with about $237 million directed to eligible drivers based on hours and miles worked. The deal requires court approval and does not change the status of current drivers, who remain independent contractors under Proposition 22.
California Labor Commissioner Lilia García-Brower said her office would waive its share of the settlement and direct those funds to drivers who filed wage claims. The settlement covers the period from April 5, 2016, through December 15, 2020. A third-party administrator will contact eligible drivers, and a website, call center, and email address will be set up to answer questions.
Years of Legal Fighting Over Worker Status
California Attorney General Rob Bonta said Lyft spent years trying to move the case into private arbitration while continuing to grow. The lawsuit was filed in May 2020 by state prosecutors and city attorneys from San Francisco, Los Angeles, and San Diego. The California Labor Commissioner's Office filed a separate wage-and-hour lawsuit in August 2020. Both cases were consolidated in San Francisco Superior Court in September 2021.
Alvaro Bolainez, vice president of Rideshare Drivers United, said drivers had waited six years for the settlement. He called it a significant payout but noted it fell short of full compensation. Lyft maintained throughout the lawsuit that drivers were properly classified as independent contractors.
Most Settlement Money Goes Directly to Drivers
Of the $272.5 million total, $237 million (87%) will go to eligible Lyft drivers in California. Payments will be calculated based on how many hours and miles each driver worked during the covered period from April 2016 to December 2020. The California Labor Commissioner's Office waived its penalty share and directed those funds to drivers with wage claims, increasing payouts for about 1,600 drivers.
Eligible drivers do not need to file a claim. A court-approved third-party administrator will identify and contact them automatically. The administrator will also set up a website, email address, and call center to handle driver questions about payment amounts and timelines.
Uber Case Still Pending, Prop 22 Remains Unchanged
The Lyft settlement does not change how current drivers are classified. They remain independent contractors under California's Proposition 22, passed by voters in November 2020. Proposition 22 lets app-based companies classify drivers as contractors while offering limited benefits like accident insurance and healthcare stipends.
A similar lawsuit against Uber Technologies for the same 2016–2020 period remains unresolved. San Francisco City Attorney David Chiu called the Lyft deal "the largest wage and hour settlement in California history" and vowed to continue pursuing Uber. The settlement agreement still requires approval from San Francisco Superior Court.
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