A $272.5 million settlement was announced Thursday between rideshare company Lyft and prosecutors — including the San Diego City Attorney's Office — to resolve allegations the company misclassified its drivers as independent contractors instead of employees.
A lawsuit brought by state and local prosecutors alleged that by misclassifying its drivers between 2016 and 2020, Lyft was denying them certain protections afforded to employees such as overtime, the right to minimum wage, and reimbursements for work-related expenses.
The lawsuit was filed by the California Attorney General's Office and the city attorney's offices of San Diego, Los Angeles, and San Francisco.
California Attorney General Rob Bonta said, "Rideshare companies like Lyft have enjoyed massive growth and profits on the backs of drivers over the past decade, many of whom are from immigrant communities and communities of color. Lyft's success would not be possible without the drivers Lyft sought to unfairly short-change. Hard-working employees deserve full compensation for their labor."
As part of the settlement, which remains subject to a judge's approval, Lyft will pay $272.5 million in restitution and penalties, with roughly $237.1 million of that amount reserved for Lyft drivers. The exact amount going to drivers in the San Diego area was uncertain, but the San Diego City Attorney's Office said in a statement that "millions of dollars" were expected to go to local drivers.
San Diego City Attorney Heather Ferbert said in a statement, "Lyft coming to the table is an important step, but it doesn't close the book on misclassification in the gig economy. There is still a lot at stake for drivers, and my office will keep fighting until every worker gets what they've earned."
Driver eligibility and compensation will be based on the number of hours and miles driven between April 5, 2016, through Dec. 15, 2020. A third- party settlement administrator was expected to contact eligible drivers at a future time and a website, email address, and call center will be created to field questions from drivers.
