Lyft has agreed to pay $272.5 million to settle a lawsuit brought by California's Labor Commissioner's Office, which accused the ride-hailing company of misclassifying drivers as independent contractors rather than employees. The alleged violations span April 2016 to December 2020, a period before California voters passed Proposition 22, which carved app-based drivers out of Assembly Bill 5's employee classification requirements.
Under the settlement, the Labor Commissioner's Office will forgo its share so the funds go to drivers who filed wage claims. Lyft said it believes drivers were always properly classified but wanted to avoid the costs and distraction of protracted litigation. The settlement still requires court approval.
Uber still faces a similar lawsuit from the Labor Commissioner's Office, so the broader fight over gig-worker classification is not fully closed. Lyft's statement frames the settlement as closing a chapter from before Prop 22, while the labor commissioner credited drivers who spoke up for making the outcome possible.